Correlation Between Fortinet and Atlas Arteria
Can any of the company-specific risk be diversified away by investing in both Fortinet and Atlas Arteria 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 Atlas Arteria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and Atlas Arteria Limited, you can compare the effects of market volatilities on Fortinet and Atlas Arteria 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 Atlas Arteria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and Atlas Arteria.
Diversification Opportunities for Fortinet and Atlas Arteria
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fortinet and Atlas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and Atlas Arteria Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Arteria 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 Atlas Arteria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Arteria Limited has no effect on the direction of Fortinet i.e., Fortinet and Atlas Arteria go up and down completely randomly.
Pair Corralation between Fortinet and Atlas Arteria
Given the investment horizon of 90 days Fortinet is expected to generate 0.68 times more return on investment than Atlas Arteria. However, Fortinet is 1.47 times less risky than Atlas Arteria. It trades about 0.01 of its potential returns per unit of risk. Atlas Arteria Limited is currently generating about -0.16 per unit of risk. If you would invest 9,718 in Fortinet on September 12, 2024 and sell it today you would lose (5.00) from holding Fortinet or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fortinet vs. Atlas Arteria Limited
Performance |
| Timeline |
| Fortinet |
| Atlas Arteria Limited |
Fortinet and Atlas Arteria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and Atlas Arteria
The main advantage of trading using opposite Fortinet and Atlas Arteria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, Atlas Arteria 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 Atlas Arteria will offset losses from the drop in Atlas Arteria's long position.The idea behind Fortinet and Atlas Arteria 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.| Atlas Arteria vs. Jiangsu Expressway | Atlas Arteria vs. Jiangsu Expressway Co | Atlas Arteria vs. Zhejiang Expressway Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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