Correlation Between Adobe Systems and Altair Engineering

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Adobe Systems 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 Adobe Systems and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adobe Systems and Altair Engineering, you can compare the effects of market volatilities on Adobe Systems 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 Adobe Systems with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adobe Systems and Altair Engineering.

Diversification Opportunities for Adobe Systems and Altair Engineering

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Adobe and Altair is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Adobe Systems and Altair Engineering Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Adobe Systems 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 Adobe Systems 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 Adobe Systems i.e., Adobe Systems and Altair Engineering go up and down completely randomly.

Pair Corralation between Adobe Systems and Altair Engineering

Given the investment horizon of 90 days Adobe Systems is expected to under-perform the Altair Engineering. In addition to that, Adobe Systems is 1.04 times more volatile than Altair Engineering. It trades about -0.04 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.02 per unit of volatility. If you would invest  5,157  in Altair Engineering on April 6, 2022 and sell it today you would earn a total of  50.00  from holding Altair Engineering or generate 0.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Adobe Systems  vs.  Altair Engineering Inc

 Performance (%) 
      Timeline 
Adobe Systems 
Adobe Performance
0 of 100
Over the last 90 days Adobe Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in August 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Structure and Payout Changes

Last Split Factor
2:1
Ex Dividend Date
2005-03-24
Last Split Date
2005-05-24

Adobe Price Channel

Altair Engineering 
Altair Performance
0 of 100
Over the last 90 days Altair Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Altair Price Channel

Adobe Systems and Altair Engineering Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Adobe Systems and Altair Engineering

The main advantage of trading using opposite Adobe Systems and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adobe Systems 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 Adobe Systems 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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

Other Complementary Tools

Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go