Correlation Between Cisco Systems and IShares Global
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and IShares Global 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 IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and iShares Global Timber, you can compare the effects of market volatilities on Cisco Systems and IShares Global 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 IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and IShares Global.
Diversification Opportunities for Cisco Systems and IShares Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Cisco Systems i.e., Cisco Systems and IShares Global go up and down completely randomly.
Pair Corralation between Cisco Systems and IShares Global
Assuming the 90 days trading horizon Cisco Systems is expected to generate 18.64 times more return on investment than IShares Global. However, Cisco Systems is 18.64 times more volatile than iShares Global Timber. It trades about 0.05 of its potential returns per unit of risk. iShares Global Timber is currently generating about 0.07 per unit of risk. If you would invest 89,245 in Cisco Systems on August 30, 2024 and sell it today you would earn a total of 33,598 from holding Cisco Systems or generate 37.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cisco Systems vs. iShares Global Timber
Performance |
| Timeline |
| Cisco Systems |
| iShares Global Timber |
Cisco Systems and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and IShares Global
The main advantage of trading using opposite Cisco Systems and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| Cisco Systems vs. McEwen Mining | Cisco Systems vs. Cognizant Technology Solutions | Cisco Systems vs. Costco Wholesale | Cisco Systems vs. Grupo Carso SAB |
| IShares Global vs. Direxion Shares ETF | IShares Global vs. ProShares Trust | IShares Global vs. SPDR Series Trust | IShares Global vs. iShares Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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