Correlation Between Banco Comercial and Fortinet
Can any of the company-specific risk be diversified away by investing in both Banco Comercial 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 Banco Comercial and Fortinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Comercial Portugues and Fortinet, you can compare the effects of market volatilities on Banco Comercial 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 Banco Comercial with a short position of Fortinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Comercial and Fortinet.
Diversification Opportunities for Banco Comercial and Fortinet
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Fortinet is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Banco Comercial Portugues and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet and Banco Comercial 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 Banco Comercial Portugues 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 Banco Comercial i.e., Banco Comercial and Fortinet go up and down completely randomly.
Pair Corralation between Banco Comercial and Fortinet
Assuming the 90 days trading horizon Banco Comercial Portugues is expected to generate 1.49 times more return on investment than Fortinet. However, Banco Comercial is 1.49 times more volatile than Fortinet. It trades about 0.2 of its potential returns per unit of risk. Fortinet is currently generating about -0.1 per unit of risk. If you would invest 27.00 in Banco Comercial Portugues on December 29, 2023 and sell it today you would earn a total of 3.00 from holding Banco Comercial Portugues or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Banco Comercial Portugues vs. Fortinet
Performance |
Timeline |
Banco Comercial Portugues |
Fortinet |
Banco Comercial and Fortinet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Comercial and Fortinet
The main advantage of trading using opposite Banco Comercial and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Comercial 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.Banco Comercial vs. Inapa Inv | Banco Comercial vs. Merlin Properties SOCIMI | Banco Comercial vs. Semapa | Banco Comercial vs. Galp Energia SGPS |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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