Correlation Between Akamai Technologies and Fossil
Can any of the company-specific risk be diversified away by investing in both Akamai Technologies and Fossil 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 Akamai Technologies and Fossil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akamai Technologies and Fossil Group, you can compare the effects of market volatilities on Akamai Technologies and Fossil 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 Akamai Technologies with a short position of Fossil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akamai Technologies and Fossil.
Diversification Opportunities for Akamai Technologies and Fossil
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akamai and Fossil is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies and Fossil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group and Akamai Technologies 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 Akamai Technologies are associated (or correlated) with Fossil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group has no effect on the direction of Akamai Technologies i.e., Akamai Technologies and Fossil go up and down completely randomly.
Pair Corralation between Akamai Technologies and Fossil
Given the investment horizon of 90 days Akamai Technologies is expected to generate 0.33 times more return on investment than Fossil. However, Akamai Technologies is 3.04 times less risky than Fossil. It trades about 0.01 of its potential returns per unit of risk. Fossil Group is currently generating about -0.07 per unit of risk. If you would invest 9,867 in Akamai Technologies on January 25, 2024 and sell it today you would earn a total of 309.00 from holding Akamai Technologies or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akamai Technologies vs. Fossil Group
Performance |
| Timeline |
| Akamai Technologies |
| Fossil Group |
Akamai Technologies and Fossil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akamai Technologies and Fossil
The main advantage of trading using opposite Akamai Technologies and Fossil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies position performs unexpectedly, Fossil 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 Fossil will offset losses from the drop in Fossil's long position.| Akamai Technologies vs. Crowdstrike Holdings | Akamai Technologies vs. Cloudflare | Akamai Technologies vs. Palo Alto Networks | Akamai Technologies vs. Zscaler |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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