Correlation Between Altair Engineering and MongoDB
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and MongoDB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Altair Engineering and MongoDB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and MongoDB, you can compare the effects of market volatilities on Altair Engineering and MongoDB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Altair Engineering with a short position of MongoDB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and MongoDB.
Diversification Opportunities for Altair Engineering and MongoDB
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altair and MongoDB is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and Altair Engineering is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Altair Engineering are associated (or correlated) with MongoDB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MongoDB has no effect on the direction of Altair Engineering i.e., Altair Engineering and MongoDB go up and down completely randomly.
Pair Corralation between Altair Engineering and MongoDB
Given the investment horizon of 90 days Altair Engineering is expected to generate 35.04 times less return on investment than MongoDB. But when comparing it to its historical volatility, Altair Engineering is 17.22 times less risky than MongoDB. It trades about 0.15 of its potential returns per unit of risk. MongoDB is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 25,311 in MongoDB on November 18, 2024 and sell it today you would earn a total of 3,652 from holding MongoDB or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. MongoDB
Performance |
| Timeline |
| Altair Engineering |
| MongoDB |
Altair Engineering and MongoDB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and MongoDB
The main advantage of trading using opposite Altair Engineering and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, MongoDB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MongoDB will offset losses from the drop in MongoDB's long position.| Altair Engineering vs. Global Blue Group | Altair Engineering vs. EverCommerce | Altair Engineering vs. CSG Systems International | Altair Engineering vs. Consensus Cloud Solutions |
| MongoDB vs. Crowdstrike Holdings | MongoDB vs. Okta Inc | MongoDB vs. Cloudflare | MongoDB vs. Palo Alto Networks |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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