Source: Keydifferences
When picking securities from a fast-growing sector like the cybersecurity (HACK) sector, after performing fundamental analysis to examine stocks that should be added to your portfolio, it is equally imperative that you perform a risk analysis. When performing a risk analysis, a peer-based risk analysis is recommended. This provides a basket of comparison for the stocks in your portfolio. While risk analysis can’t be used to predict future returns, it can help understand three things:
The success and evolution of a group of highly correlated stocks over the years.
Investors' sentiment