Correlation Between Fortinet and Dassault Systmes
Can any of the company-specific risk be diversified away by investing in both Fortinet and Dassault Systmes 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 Dassault Systmes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and Dassault Systmes SE, you can compare the effects of market volatilities on Fortinet and Dassault Systmes 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 Dassault Systmes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and Dassault Systmes.
Diversification Opportunities for Fortinet and Dassault Systmes
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortinet and Dassault is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and Dassault Systmes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systmes 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 Dassault Systmes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systmes has no effect on the direction of Fortinet i.e., Fortinet and Dassault Systmes go up and down completely randomly.
Pair Corralation between Fortinet and Dassault Systmes
Assuming the 90 days horizon Fortinet is expected to under-perform the Dassault Systmes. In addition to that, Fortinet is 1.64 times more volatile than Dassault Systmes SE. It trades about -0.32 of its total potential returns per unit of risk. Dassault Systmes SE is currently generating about -0.04 per unit of volatility. If you would invest 4,000 in Dassault Systmes SE on December 11, 2024 and sell it today you would lose (40.00) from holding Dassault Systmes SE or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortinet vs. Dassault Systmes SE
Performance |
| Timeline |
| Fortinet |
| Dassault Systmes |
Fortinet and Dassault Systmes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and Dassault Systmes
The main advantage of trading using opposite Fortinet and Dassault Systmes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, Dassault Systmes 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 Dassault Systmes will offset losses from the drop in Dassault Systmes' long position.| Fortinet vs. FLOW TRADERS LTD | Fortinet vs. Tradeweb Markets | Fortinet vs. Indutrade AB | Fortinet vs. Fast Retailing Co |
| Dassault Systmes vs. Sumitomo Chemical | Dassault Systmes vs. CHEMICAL INDUSTRIES | Dassault Systmes vs. FUYO GENERAL LEASE | Dassault Systmes vs. Sinopec Shanghai Petrochemical |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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