Correlation Between Fortinet and Globant SA
Can any of the company-specific risk be diversified away by investing in both Fortinet and Globant SA 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 Fortinet and Globant SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and Globant SA, you can compare the effects of market volatilities on Fortinet and Globant SA 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 Fortinet with a short position of Globant SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and Globant SA.
Diversification Opportunities for Fortinet and Globant SA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortinet and Globant is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and Globant SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globant SA and Fortinet 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 Fortinet are associated (or correlated) with Globant SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globant SA has no effect on the direction of Fortinet i.e., Fortinet and Globant SA go up and down completely randomly.
Pair Corralation between Fortinet and Globant SA
Assuming the 90 days horizon Fortinet is expected to generate 0.84 times more return on investment than Globant SA. However, Fortinet is 1.19 times less risky than Globant SA. It trades about 0.2 of its potential returns per unit of risk. Globant SA is currently generating about 0.12 per unit of risk. If you would invest 6,947 in Fortinet on September 2, 2024 and sell it today you would earn a total of 2,087 from holding Fortinet or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortinet vs. Globant SA
Performance |
| Timeline |
| Fortinet |
| Globant SA |
Fortinet and Globant SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and Globant SA
The main advantage of trading using opposite Fortinet and Globant SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, Globant SA 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 Globant SA will offset losses from the drop in Globant SA's long position.| Fortinet vs. Synopsys | Fortinet vs. Superior Plus Corp | Fortinet vs. NMI Holdings | Fortinet vs. Origin Agritech |
| Globant SA vs. SPORT LISBOA E | Globant SA vs. Air Transport Services | Globant SA vs. SPORTING | Globant SA vs. USWE SPORTS AB |
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 the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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