Correlation Between OPERA SOFTWARE and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both OPERA SOFTWARE 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 OPERA SOFTWARE and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPERA SOFTWARE and Altair Engineering, you can compare the effects of market volatilities on OPERA SOFTWARE 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 OPERA SOFTWARE with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and Altair Engineering.
Diversification Opportunities for OPERA SOFTWARE and Altair Engineering
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OPERA and Altair is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and OPERA SOFTWARE 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 OPERA SOFTWARE 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 OPERA SOFTWARE i.e., OPERA SOFTWARE and Altair Engineering go up and down completely randomly.
Pair Corralation between OPERA SOFTWARE and Altair Engineering
Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 30.85 times less return on investment than Altair Engineering. In addition to that, OPERA SOFTWARE is 2.27 times more volatile than Altair Engineering. It trades about 0.01 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.51 per unit of volatility. If you would invest 10,000 in Altair Engineering on October 12, 2024 and sell it today you would earn a total of 600.00 from holding Altair Engineering or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
OPERA SOFTWARE vs. Altair Engineering
Performance |
| Timeline |
| OPERA SOFTWARE |
| Altair Engineering |
OPERA SOFTWARE and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPERA SOFTWARE and Altair Engineering
The main advantage of trading using opposite OPERA SOFTWARE and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPERA SOFTWARE 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.| OPERA SOFTWARE vs. FLOW TRADERS LTD | OPERA SOFTWARE vs. ecotel communication ag | OPERA SOFTWARE vs. MARKET VECTR RETAIL | OPERA SOFTWARE vs. Zoom Video Communications |
| Altair Engineering vs. OPERA SOFTWARE | Altair Engineering vs. Playtech plc | Altair Engineering vs. PSI Software AG | Altair Engineering vs. FORMPIPE SOFTWARE AB |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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