Correlation Between Cisco Systems and ABN AMRO
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and ABN AMRO 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 ABN AMRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and ABN AMRO Bank, you can compare the effects of market volatilities on Cisco Systems and ABN AMRO 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 ABN AMRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and ABN AMRO.
Diversification Opportunities for Cisco Systems and ABN AMRO
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and ABN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and ABN AMRO Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABN AMRO Bank 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 ABN AMRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABN AMRO Bank has no effect on the direction of Cisco Systems i.e., Cisco Systems and ABN AMRO go up and down completely randomly.
Pair Corralation between Cisco Systems and ABN AMRO
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.76 times more return on investment than ABN AMRO. However, Cisco Systems is 1.31 times less risky than ABN AMRO. It trades about 0.26 of its potential returns per unit of risk. ABN AMRO Bank is currently generating about -0.22 per unit of risk. If you would invest 5,528 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 346.00 from holding Cisco Systems or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. ABN AMRO Bank
Performance |
| Timeline |
| Cisco Systems |
| ABN AMRO Bank |
Cisco Systems and ABN AMRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and ABN AMRO
The main advantage of trading using opposite Cisco Systems and ABN AMRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, ABN AMRO 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 ABN AMRO will offset losses from the drop in ABN AMRO's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
| ABN AMRO vs. Barclays PLC | ABN AMRO vs. Bank of America | ABN AMRO vs. Bank of America | ABN AMRO vs. Banco Bilbao Vizcaya |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |