Correlation Between Fortinet and Magic Software
Can any of the company-specific risk be diversified away by investing in both Fortinet and Magic Software 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 Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and Magic Software Enterprises, you can compare the effects of market volatilities on Fortinet and Magic Software 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 Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and Magic Software.
Diversification Opportunities for Fortinet and Magic Software
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortinet and Magic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and Magic Software Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Software Enter 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 Magic Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Software Enter has no effect on the direction of Fortinet i.e., Fortinet and Magic Software go up and down completely randomly.
Pair Corralation between Fortinet and Magic Software
Assuming the 90 days horizon Fortinet is expected to generate 0.87 times more return on investment than Magic Software. However, Fortinet is 1.14 times less risky than Magic Software. It trades about 0.06 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.01 per unit of risk. If you would invest 5,655 in Fortinet on November 5, 2024 and sell it today you would earn a total of 4,105 from holding Fortinet or generate 72.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortinet vs. Magic Software Enterprises
Performance |
| Timeline |
| Fortinet |
| Magic Software Enter |
Fortinet and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and Magic Software
The main advantage of trading using opposite Fortinet and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, Magic Software 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 Magic Software will offset losses from the drop in Magic Software's long position.| Fortinet vs. MICRONIC MYDATA | Fortinet vs. MAGNUM MINING EXP | Fortinet vs. Automatic Data Processing | Fortinet vs. FIREWEED METALS P |
| Magic Software vs. CREO MEDICAL GRP | Magic Software vs. CompuGroup Medical SE | Magic Software vs. Hua Hong Semiconductor | Magic Software vs. Inspire Medical Systems |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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