Correlation Between Marqeta and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Marqeta and Altair Engineering 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 Marqeta and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marqeta and Altair Engineering, you can compare the effects of market volatilities on Marqeta and Altair Engineering 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 Marqeta with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marqeta and Altair Engineering.
Diversification Opportunities for Marqeta and Altair Engineering
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marqeta and Altair is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Marqeta 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 Marqeta are associated (or correlated) with Altair Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair Engineering has no effect on the direction of Marqeta i.e., Marqeta and Altair Engineering go up and down completely randomly.
Pair Corralation between Marqeta and Altair Engineering
Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Altair Engineering. In addition to that, Marqeta is 12.11 times more volatile than Altair Engineering. It trades about -0.13 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.15 per unit of volatility. If you would invest 11,041 in Altair Engineering on November 18, 2024 and sell it today you would earn a total of 44.00 from holding Altair Engineering or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marqeta vs. Altair Engineering
Performance |
| Timeline |
| Marqeta |
| Altair Engineering |
Marqeta and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marqeta and Altair Engineering
The main advantage of trading using opposite Marqeta and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta position performs unexpectedly, Altair Engineering 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 Altair Engineering will offset losses from the drop in Altair Engineering's long position.The idea behind Marqeta and Altair Engineering pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Altair Engineering vs. Global Blue Group | Altair Engineering vs. EverCommerce | Altair Engineering vs. CSG Systems International | Altair Engineering vs. Consensus Cloud Solutions |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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