Correlation Between Altair Engineering and Blackline

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

Diversification Opportunities for Altair Engineering and Blackline

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Altair and Blackline is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering Inc and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline 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 Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of Altair Engineering i.e., Altair Engineering and Blackline go up and down completely randomly.

Pair Corralation between Altair Engineering and Blackline

Given the investment horizon of 90 days Altair Engineering is expected to generate 0.82 times more return on investment than Blackline. However, Altair Engineering is 1.22 times less risky than Blackline. It trades about 0.04 of its potential returns per unit of risk. Blackline is currently generating about 0.01 per unit of risk. If you would invest  4,035  in Altair Engineering on May 9, 2022 and sell it today you would earn a total of  1,754  from holding Altair Engineering or generate 43.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Altair Engineering Inc  vs.  Blackline

 Performance (%) 
       Timeline  
Altair Engineering 
Altair Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Altair Engineering reported solid returns over the last few months and may actually be approaching a breakup point.

Altair Price Channel

Blackline 
Blackline Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain essential indicators, Blackline revealed solid returns over the last few months and may actually be approaching a breakup point.

Blackline Price Channel

Altair Engineering and Blackline Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altair Engineering and Blackline

The main advantage of trading using opposite Altair Engineering and Blackline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Blackline 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 Blackline will offset losses from the drop in Blackline's long position.
The idea behind Altair Engineering and Blackline 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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