Correlation Between Fortinet and Astra International

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Can any of the company-specific risk be diversified away by investing in both Fortinet and Astra International 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 Fortinet and Astra International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and Astra International Tbk, you can compare the effects of market volatilities on Fortinet and Astra International 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 Fortinet with a short position of Astra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and Astra International.

Diversification Opportunities for Fortinet and Astra International

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Fortinet and Astra is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk and Fortinet 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 Fortinet are associated (or correlated) with Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Fortinet i.e., Fortinet and Astra International go up and down completely randomly.

Pair Corralation between Fortinet and Astra International

Given the investment horizon of 90 days Fortinet is expected to generate 1.86 times more return on investment than Astra International. However, Fortinet is 1.86 times more volatile than Astra International Tbk. It trades about 0.01 of its potential returns per unit of risk. Astra International Tbk is currently generating about -0.16 per unit of risk. If you would invest  5,123  in Fortinet on September 8, 2022 and sell it today you would lose (38.00)  from holding Fortinet or give up 0.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fortinet  vs.  Astra International Tbk

 Performance (%) 
       Timeline  
Fortinet 
Fortinet Performance
0 of 100
Over the last 90 days Fortinet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fortinet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Fortinet Price Channel

Astra International Tbk 
Astra Performance
0 of 100
Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for the company investors.

Astra Price Channel

Fortinet and Astra International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortinet and Astra International

The main advantage of trading using opposite Fortinet and Astra International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, Astra International 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 Astra International will offset losses from the drop in Astra International's long position.
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The idea behind Fortinet and Astra International Tbk 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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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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