Correlation Between Altair Engineering and Arqit Quantum

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

Diversification Opportunities for Altair Engineering and Arqit Quantum

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Altair and Arqit is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering Inc and Arqit Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arqit Quantum 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 Arqit Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arqit Quantum has no effect on the direction of Altair Engineering i.e., Altair Engineering and Arqit Quantum go up and down completely randomly.

Pair Corralation between Altair Engineering and Arqit Quantum

Given the investment horizon of 90 days Altair Engineering is expected to under-perform the Arqit Quantum. But the stock apears to be less risky and, when comparing its historical volatility, Altair Engineering is 2.28 times less risky than Arqit Quantum. The stock trades about -0.08 of its potential returns per unit of risk. The Arqit Quantum is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  650.00  in Arqit Quantum on April 6, 2022 and sell it today you would lose (34.00)  from holding Arqit Quantum or give up 5.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Altair Engineering Inc  vs.  Arqit Quantum

 Performance (%) 
      Timeline 
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

Arqit Quantum 
Arqit Performance
0 of 100
Over the last 90 days Arqit Quantum 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 basic indicators remain very healthy which may send shares a bit higher in August 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Arqit Price Channel

Altair Engineering and Arqit Quantum Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Altair Engineering and Arqit Quantum

The main advantage of trading using opposite Altair Engineering and Arqit Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Arqit Quantum 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 Arqit Quantum will offset losses from the drop in Arqit Quantum's long position.
The idea behind Altair Engineering and Arqit Quantum 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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