Correlation Between Marqeta and Fortinet

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

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

Diversification Opportunities for Marqeta and Fortinet

-0.78

Correlation Coefficient

Marqeta  Fortinet

Pay attention - limited upside

The 3 months correlation between Marqeta and Fortinet is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet and Marqeta 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 Marqeta 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 Marqeta i.e., Marqeta and Fortinet go up and down completely randomly.

Pair Corralation between Marqeta and Fortinet

Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Fortinet. In addition to that, Marqeta is 1.53 times more volatile than Fortinet. It trades about -0.07 of its total potential returns per unit of risk. Fortinet is currently generating about 0.14 per unit of volatility. If you would invest  9,079  in Fortinet on September 20, 2024 and sell it today you would earn a total of  434.00  from holding Fortinet or generate 4.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Marqeta  vs.  Fortinet

Marqeta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marqeta has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise 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 weak basic indicators, Fortinet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marqeta and Fortinet

The main advantage of trading using opposite Marqeta and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta 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 Marqeta 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 CEOs Directory module to screen CEOs from public companies around the world.