Correlation Between Alfi and Fortinet

Can any of the company-specific risk be diversified away by investing in both Alfi and Fortinet 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 Alfi and Fortinet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alfi Inc and Fortinet, you can compare the effects of market volatilities on Alfi and Fortinet 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 Alfi with a short position of Fortinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfi and Fortinet.

Diversification Opportunities for Alfi and Fortinet

-0.02

Correlation Coefficient

Alfi  Fortinet

Good diversification

The 3 months correlation between Alfi and Fortinet is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alfi Inc and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet and Alfi 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 Alfi Inc are associated (or correlated) with Fortinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortinet has no effect on the direction of Alfi i.e., Alfi and Fortinet go up and down completely randomly.

Pair Corralation between Alfi and Fortinet

If you would invest  7,744  in Fortinet on September 23, 2024 and sell it today you would earn a total of  1,975  from holding Fortinet or generate 25.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Alfi Inc  vs.  Fortinet

Alfi Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alfi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Alfi is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Fortinet

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortinet are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fortinet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alfi and Fortinet

The main advantage of trading using opposite Alfi and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfi position performs unexpectedly, Fortinet 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 Fortinet will offset losses from the drop in Fortinet's long position.

The idea behind Alfi Inc and Fortinet 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.