Correlation Between Bakkt Hldgs and Altair Engineering

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

Diversification Opportunities for Bakkt Hldgs and Altair Engineering

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bakkt and Altair is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Hldgs and Altair Engineering Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Bakkt Hldgs 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 Bakkt Hldgs 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 Bakkt Hldgs i.e., Bakkt Hldgs and Altair Engineering go up and down completely randomly.

Pair Corralation between Bakkt Hldgs and Altair Engineering

Given the investment horizon of 90 days Bakkt Hldgs is expected to generate 5.89 times more return on investment than Altair Engineering. However, Bakkt Hldgs is 5.89 times more volatile than Altair Engineering. It trades about 0.01 of its potential returns per unit of risk. Altair Engineering is currently generating about 0.01 per unit of risk. If you would invest  1,100  in Bakkt Hldgs on June 29, 2022 and sell it today you would lose (881.00)  from holding Bakkt Hldgs or give up 80.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy93.76%
ValuesDaily Returns

Bakkt Hldgs  vs.  Altair Engineering Inc

 Performance (%) 
       Timeline  
Bakkt Hldgs 
Bakkt Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bakkt Hldgs are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Bakkt Hldgs may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Bakkt 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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Altair Price Channel

Bakkt Hldgs and Altair Engineering Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bakkt Hldgs and Altair Engineering

The main advantage of trading using opposite Bakkt Hldgs and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Hldgs 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.
Bakkt Hldgs vs. Kibush Capital Corp
The idea behind Bakkt Hldgs 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.
Altair Engineering vs. Kibush Capital Corp
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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