Correlation Between Cisco Systems and KEBNI AB
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and KEBNI AB 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 Cisco Systems and KEBNI AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and KEBNI AB SERB, you can compare the effects of market volatilities on Cisco Systems and KEBNI AB 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 Cisco Systems with a short position of KEBNI AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and KEBNI AB.
Diversification Opportunities for Cisco Systems and KEBNI AB
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and KEBNI is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and KEBNI AB SERB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEBNI AB SERB and Cisco Systems 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 Cisco Systems are associated (or correlated) with KEBNI AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEBNI AB SERB has no effect on the direction of Cisco Systems i.e., Cisco Systems and KEBNI AB go up and down completely randomly.
Pair Corralation between Cisco Systems and KEBNI AB
Assuming the 90 days horizon Cisco Systems is expected to generate 0.32 times more return on investment than KEBNI AB. However, Cisco Systems is 3.11 times less risky than KEBNI AB. It trades about 0.07 of its potential returns per unit of risk. KEBNI AB SERB is currently generating about 0.01 per unit of risk. If you would invest 4,017 in Cisco Systems on August 31, 2024 and sell it today you would earn a total of 1,598 from holding Cisco Systems or generate 39.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Cisco Systems vs. KEBNI AB SERB
Performance |
| Timeline |
| Cisco Systems |
| KEBNI AB SERB |
Cisco Systems and KEBNI AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and KEBNI AB
The main advantage of trading using opposite Cisco Systems and KEBNI AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, KEBNI AB 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 KEBNI AB will offset losses from the drop in KEBNI AB's long position.| Cisco Systems vs. Cisco Systems | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Nokia | Cisco Systems vs. Nokia |
| KEBNI AB vs. SMA Solar Technology | KEBNI AB vs. X Fab Silicon | KEBNI AB vs. Chesapeake Utilities | KEBNI AB vs. Hyster Yale Materials Handling |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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