Correlation Between Fortinet and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Fortinet and CyberArk 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 CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and CyberArk Software, you can compare the effects of market volatilities on Fortinet and CyberArk 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 CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and CyberArk Software.
Diversification Opportunities for Fortinet and CyberArk Software
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortinet and CyberArk is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software 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 CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of Fortinet i.e., Fortinet and CyberArk Software go up and down completely randomly.
Pair Corralation between Fortinet and CyberArk Software
Given the investment horizon of 90 days Fortinet is expected to generate 1.42 times more return on investment than CyberArk Software. However, Fortinet is 1.42 times more volatile than CyberArk Software. It trades about 0.23 of its potential returns per unit of risk. CyberArk Software is currently generating about 0.24 per unit of risk. If you would invest 8,076 in Fortinet on August 27, 2024 and sell it today you would earn a total of 1,201 from holding Fortinet or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortinet vs. CyberArk Software
Performance |
| Timeline |
| Fortinet |
| CyberArk Software |
Fortinet and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and CyberArk Software
The main advantage of trading using opposite Fortinet and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, CyberArk 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 CyberArk Software will offset losses from the drop in CyberArk Software's long position.The idea behind Fortinet and CyberArk Software 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.| CyberArk Software vs. GigaCloud Technology Class | CyberArk Software vs. Arqit Quantum | CyberArk Software vs. Cemtrex | CyberArk Software vs. Paysafe |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |