Correlation Between Cisco Systems and BGC Partners
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and BGC Partners 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 BGC Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and BGC Partners, you can compare the effects of market volatilities on Cisco Systems and BGC Partners 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 BGC Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and BGC Partners.
Diversification Opportunities for Cisco Systems and BGC Partners
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and BGC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and BGC Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Partners 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 BGC Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Partners has no effect on the direction of Cisco Systems i.e., Cisco Systems and BGC Partners go up and down completely randomly.
Pair Corralation between Cisco Systems and BGC Partners
If you would invest 4,866 in Cisco Systems on September 12, 2024 and sell it today you would earn a total of 1,006 from holding Cisco Systems or generate 20.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Cisco Systems vs. BGC Partners
Performance |
| Timeline |
| Cisco Systems |
| BGC Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and BGC Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and BGC Partners
The main advantage of trading using opposite Cisco Systems and BGC Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, BGC Partners 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 BGC Partners will offset losses from the drop in BGC Partners' long position.| Cisco Systems vs. Victory Integrity Smallmid Cap | Cisco Systems vs. Hilton Worldwide Holdings | Cisco Systems vs. NVIDIA | Cisco Systems vs. JPMorgan Chase Co |
| BGC Partners vs. Newmark Group | BGC Partners vs. Consolidated Communications | BGC Partners vs. Brookline Bancorp | BGC Partners vs. SLR Investment Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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