Correlation Between Fortinet and AGL Energy
Can any of the company-specific risk be diversified away by investing in both Fortinet and AGL Energy 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 AGL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and AGL Energy Limited, you can compare the effects of market volatilities on Fortinet and AGL Energy 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 AGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and AGL Energy.
Diversification Opportunities for Fortinet and AGL Energy
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortinet and AGL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and AGL Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGL Energy Limited 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 AGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGL Energy Limited has no effect on the direction of Fortinet i.e., Fortinet and AGL Energy go up and down completely randomly.
Pair Corralation between Fortinet and AGL Energy
Given the investment horizon of 90 days Fortinet is expected to generate 1.3 times more return on investment than AGL Energy. However, Fortinet is 1.3 times more volatile than AGL Energy Limited. It trades about 0.11 of its potential returns per unit of risk. AGL Energy Limited is currently generating about 0.06 per unit of risk. If you would invest 5,132 in Fortinet on September 2, 2024 and sell it today you would earn a total of 4,373 from holding Fortinet or generate 85.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 57.26% |
| Values | Daily Returns |
Fortinet vs. AGL Energy Limited
Performance |
| Timeline |
| Fortinet |
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fortinet and AGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and AGL Energy
The main advantage of trading using opposite Fortinet and AGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, AGL Energy 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 AGL Energy will offset losses from the drop in AGL Energy's long position.The idea behind Fortinet and AGL Energy Limited 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.| AGL Energy vs. Emerson Radio | AGL Energy vs. BJs Restaurants | AGL Energy vs. GEN Restaurant Group, | AGL Energy vs. Canlan Ice Sports |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |