Correlation Between Aeris Indstria and Fortinet

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

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

Diversification Opportunities for Aeris Indstria and Fortinet

0.2

Correlation Coefficient

Aeris Indstria  Fortinet

Modest diversification

The 3 months correlation between Aeris and Fortinet is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Indstria e and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet and Aeris Indstria 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 Aeris Indstria e 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 Aeris Indstria i.e., Aeris Indstria and Fortinet go up and down completely randomly.

Pair Corralation between Aeris Indstria and Fortinet

Assuming the 90 days trading horizon Aeris Indstria e is expected to generate 10.14 times more return on investment than Fortinet. However, Aeris Indstria is 10.14 times more volatile than Fortinet. It trades about 0.22 of its potential returns per unit of risk. Fortinet is currently generating about 0.17 per unit of risk. If you would invest  508.00  in Aeris Indstria e on September 29, 2024 and sell it today you would earn a total of  323.00  from holding Aeris Indstria e or generate 63.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Aeris Indstria e  vs.  Fortinet

Aeris Indstria e

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeris Indstria e are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aeris Indstria unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fortinet

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortinet are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fortinet sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeris Indstria and Fortinet

The main advantage of trading using opposite Aeris Indstria and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Indstria 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 Aeris Indstria e 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.