Correlation Between Cisco Systems and Acasti Pharma
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Acasti Pharma 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 Acasti Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Acasti Pharma, you can compare the effects of market volatilities on Cisco Systems and Acasti Pharma 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 Acasti Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Acasti Pharma.
Diversification Opportunities for Cisco Systems and Acasti Pharma
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cisco and Acasti is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Acasti Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acasti Pharma 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 Acasti Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acasti Pharma has no effect on the direction of Cisco Systems i.e., Cisco Systems and Acasti Pharma go up and down completely randomly.
Pair Corralation between Cisco Systems and Acasti Pharma
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.35 times more return on investment than Acasti Pharma. However, Cisco Systems is 2.9 times less risky than Acasti Pharma. It trades about 0.1 of its potential returns per unit of risk. Acasti Pharma is currently generating about 0.01 per unit of risk. If you would invest 4,778 in Cisco Systems on September 1, 2024 and sell it today you would earn a total of 1,143 from holding Cisco Systems or generate 23.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.77% |
| Values | Daily Returns |
Cisco Systems vs. Acasti Pharma
Performance |
| Timeline |
| Cisco Systems |
| Acasti Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Cisco Systems and Acasti Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Acasti Pharma
The main advantage of trading using opposite Cisco Systems and Acasti Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Acasti Pharma 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 Acasti Pharma will offset losses from the drop in Acasti Pharma's long position.| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor |
| Acasti Pharma vs. Tonix Pharmaceuticals Holding | Acasti Pharma vs. Jaguar Animal Health | Acasti Pharma vs. Ibio Inc | Acasti Pharma vs. Akari Therapeutics PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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