Correlation Between Mimecast and Fortinet

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

Diversification Opportunities for Mimecast and Fortinet

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Mimecast and Fortinet is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mimecast Limited and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet and Mimecast 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 Mimecast Limited 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 Mimecast i.e., Mimecast and Fortinet go up and down completely randomly.

Pair Corralation between Mimecast and Fortinet

If you would invest  5,939  in Fortinet on April 7, 2022 and sell it today you would earn a total of  38.00  from holding Fortinet or generate 0.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Mimecast Limited  vs.  Fortinet

 Performance (%) 
      Timeline 
Mimecast Limited 
Mimecast Performance
0 of 100
Over the last 90 days Mimecast Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Mimecast is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Structure and Payout Changes

Last Split Factor
5:1
Last Split Date
2022-06-23

Fortinet Price Channel

Mimecast and Fortinet Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mimecast and Fortinet

The main advantage of trading using opposite Mimecast and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mimecast 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 Mimecast Limited 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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