Correlation Between Aci Worldwide and Altair Engineering

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Can any of the company-specific risk be diversified away by investing in both Aci Worldwide 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 Aci Worldwide and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aci Worldwide and Altair Engineering, you can compare the effects of market volatilities on Aci Worldwide 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 Aci Worldwide with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aci Worldwide and Altair Engineering.

Diversification Opportunities for Aci Worldwide and Altair Engineering

0.46
  Correlation Coefficient

Very weak diversification

The 24 months correlation between Aci Worldwide and Altair is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aci Worldwide and Altair Engineering Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Aci Worldwide 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 Aci Worldwide 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 Aci Worldwide i.e., Aci Worldwide and Altair Engineering go up and down completely randomly.

Pair Corralation between Aci Worldwide and Altair Engineering

Given the investment horizon of 90 days Aci Worldwide is expected to under-perform the Altair Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Aci Worldwide is 1.1 times less risky than Altair Engineering. The stock trades about -0.11 of its potential returns per unit of risk. The Altair Engineering is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  5,494  in Altair Engineering on April 6, 2022 and sell it today you would lose (287.00)  from holding Altair Engineering or give up 5.22% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aci Worldwide  vs.  Altair Engineering Inc

 Performance (%) 
      Timeline 
Aci Worldwide 
Aci Worldwide Performance
0 of 100
Over the last 90 days Aci Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Aci Worldwide is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Structure and Payout Changes

Last Split Factor
3:1
Last Split Date
2014-07-11

Aci Worldwide Price Channel

Altair Engineering 
Altair Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altair Engineering is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Altair Price Channel

Aci Worldwide and Altair Engineering Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aci Worldwide and Altair Engineering

The main advantage of trading using opposite Aci Worldwide and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aci Worldwide 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 Aci Worldwide 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.
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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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