Correlation Between F5 Networks and Akamai Technologies
Can any of the company-specific risk be diversified away by investing in both F5 Networks and Akamai Technologies 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 F5 Networks and Akamai Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between F5 Networks and Akamai Technologies, you can compare the effects of market volatilities on F5 Networks and Akamai Technologies 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 F5 Networks with a short position of Akamai Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of F5 Networks and Akamai Technologies.
Diversification Opportunities for F5 Networks and Akamai Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FFIV and Akamai is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding F5 Networks and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies and F5 Networks 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 F5 Networks are associated (or correlated) with Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of F5 Networks i.e., F5 Networks and Akamai Technologies go up and down completely randomly.
Pair Corralation between F5 Networks and Akamai Technologies
Given the investment horizon of 90 days F5 Networks is expected to generate 0.79 times more return on investment than Akamai Technologies. However, F5 Networks is 1.26 times less risky than Akamai Technologies. It trades about 0.11 of its potential returns per unit of risk. Akamai Technologies is currently generating about -0.02 per unit of risk. If you would invest 16,066 in F5 Networks on December 2, 2024 and sell it today you would earn a total of 13,177 from holding F5 Networks or generate 82.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
F5 Networks vs. Akamai Technologies
Performance |
Timeline |
F5 Networks |
Akamai Technologies |
F5 Networks and Akamai Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with F5 Networks and Akamai Technologies
The main advantage of trading using opposite F5 Networks and Akamai Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F5 Networks position performs unexpectedly, Akamai Technologies 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 Akamai Technologies will offset losses from the drop in Akamai Technologies' long position.F5 Networks vs. VeriSign | F5 Networks vs. Check Point Software | F5 Networks vs. Qualys Inc | F5 Networks vs. CyberArk Software |
Akamai Technologies vs. Check Point Software | Akamai Technologies vs. VeriSign | Akamai Technologies vs. Qualys Inc | Akamai Technologies vs. F5 Networks |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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