Correlation Between Cisco Systems and Ambase Corp
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Ambase Corp 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 Ambase Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Ambase Corp, you can compare the effects of market volatilities on Cisco Systems and Ambase Corp 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 Ambase Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Ambase Corp.
Diversification Opportunities for Cisco Systems and Ambase Corp
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Ambase is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Ambase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambase Corp 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 Ambase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambase Corp has no effect on the direction of Cisco Systems i.e., Cisco Systems and Ambase Corp go up and down completely randomly.
Pair Corralation between Cisco Systems and Ambase Corp
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.32 times more return on investment than Ambase Corp. However, Cisco Systems is 3.09 times less risky than Ambase Corp. It trades about 0.38 of its potential returns per unit of risk. Ambase Corp is currently generating about 0.01 per unit of risk. If you would invest 5,943 in Cisco Systems on November 29, 2024 and sell it today you would earn a total of 465.00 from holding Cisco Systems or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Ambase Corp
Performance |
| Timeline |
| Cisco Systems |
| Ambase Corp |
Cisco Systems and Ambase Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Ambase Corp
The main advantage of trading using opposite Cisco Systems and Ambase Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Ambase Corp 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 Ambase Corp will offset losses from the drop in Ambase Corp's long position.| Cisco Systems vs. Mynaric AG ADR | Cisco Systems vs. KVH Industries | Cisco Systems vs. Telesat Corp | Cisco Systems vs. Digi International |
| Ambase Corp vs. Aztec Land Comb | Ambase Corp vs. Bridgemarq Real Estate | Ambase Corp vs. Agritek Holdings | Ambase Corp vs. Asia Pptys |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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