Correlation Between Altair Engineering and APPTECH CORP

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

Diversification Opportunities for Altair Engineering and APPTECH CORP

0.23
  Correlation Coefficient

Modest diversification

The 24 months correlation between Altair and APPTECH is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering Inc and APPTECH CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPTECH CORP and Altair Engineering 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 Altair Engineering are associated (or correlated) with APPTECH CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPTECH CORP has no effect on the direction of Altair Engineering i.e., Altair Engineering and APPTECH CORP go up and down completely randomly.

Pair Corralation between Altair Engineering and APPTECH CORP

Given the investment horizon of 90 days Altair Engineering is expected to generate 0.26 times more return on investment than APPTECH CORP. However, Altair Engineering is 3.89 times less risky than APPTECH CORP. It trades about -0.08 of its potential returns per unit of risk. APPTECH CORP is currently generating about -0.11 per unit of risk. 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 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Altair Engineering Inc  vs.  APPTECH CORP

 Performance (%) 
      Timeline 
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

APPTECH CORP 
APPTECH Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in APPTECH CORP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, APPTECH CORP showed solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
1:9
Last Split Date
2022-01-05

APPTECH Price Channel

Altair Engineering and APPTECH CORP Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Altair Engineering and APPTECH CORP

The main advantage of trading using opposite Altair Engineering and APPTECH CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, APPTECH CORP 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 APPTECH CORP will offset losses from the drop in APPTECH CORP's long position.
The idea behind Altair Engineering and APPTECH CORP 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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