Correlation Between Unity Software and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Unity 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 Unity 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 Unity Software and Altair Engineering, you can compare the effects of market volatilities on Unity 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 Unity Software with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unity Software and Altair Engineering.
Diversification Opportunities for Unity Software and Altair Engineering
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unity and Altair is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Unity 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 Unity 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 Unity Software i.e., Unity Software and Altair Engineering go up and down completely randomly.
Pair Corralation between Unity Software and Altair Engineering
Assuming the 90 days horizon Unity Software is expected to generate 1.08 times less return on investment than Altair Engineering. In addition to that, Unity Software is 1.84 times more volatile than Altair Engineering. It trades about 0.09 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.18 per unit of volatility. If you would invest 8,500 in Altair Engineering on August 29, 2024 and sell it today you would earn a total of 1,450 from holding Altair Engineering or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Unity Software vs. Altair Engineering
Performance |
| Timeline |
| Unity Software |
| Altair Engineering |
Unity Software and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unity Software and Altair Engineering
The main advantage of trading using opposite Unity Software and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unity 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.| Unity Software vs. Apple Inc | Unity Software vs. Apple Inc | Unity Software vs. Apple Inc | Unity Software vs. Apple Inc |
| Altair Engineering vs. Microsoft | Altair Engineering vs. Adobe Inc | Altair Engineering vs. ADYEN NV UNSPADR001 | Altair Engineering vs. Square Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |