Correlation Between A10 Network and Altair Engineering

Can any of the company-specific risk be diversified away by investing in both A10 Network 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 A10 Network and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A10 Network and Altair Engineering, you can compare the effects of market volatilities on A10 Network 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 A10 Network with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Altair Engineering.

Diversification Opportunities for A10 Network and Altair Engineering

-0.76

Correlation Coefficient

A10 Network  Altair Engineering

Pay attention - limited upside

The 3 months correlation between A10 and Altair is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and A10 Network 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 A10 Network 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 A10 Network i.e., A10 Network and Altair Engineering go up and down completely randomly.

Pair Corralation between A10 Network and Altair Engineering

Given the investment horizon of 90 days A10 Network is expected to generate 1.52 times less return on investment than Altair Engineering. In addition to that, A10 Network is 1.26 times more volatile than Altair Engineering. It trades about 0.03 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.06 per unit of volatility. If you would invest  6,991  in Altair Engineering on February 11, 2025 and sell it today you would earn a total of  4,194  from holding Altair Engineering or generate 59.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.33%
Values	Daily Returns

A10 Network  vs.  Altair Engineering

A10 Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days A10 Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Altair Engineering

Risk-Adjusted Performance

Solid

Over the last 90 days Altair Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Altair Engineering is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with A10 Network and Altair Engineering

The main advantage of trading using opposite A10 Network and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network 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 A10 Network 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.

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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 the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.