Correlation Between Cisco Systems and Bonterra Energy
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Bonterra Energy 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 Bonterra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Bonterra Energy Corp, you can compare the effects of market volatilities on Cisco Systems and Bonterra Energy 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 Bonterra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Bonterra Energy.
Diversification Opportunities for Cisco Systems and Bonterra Energy
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and Bonterra is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Bonterra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra Energy 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 Bonterra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Energy Corp has no effect on the direction of Cisco Systems i.e., Cisco Systems and Bonterra Energy go up and down completely randomly.
Pair Corralation between Cisco Systems and Bonterra Energy
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.46 times more return on investment than Bonterra Energy. However, Cisco Systems is 2.17 times less risky than Bonterra Energy. It trades about 0.16 of its potential returns per unit of risk. Bonterra Energy Corp is currently generating about -0.11 per unit of risk. If you would invest 4,666 in Cisco Systems on September 2, 2024 and sell it today you would earn a total of 1,255 from holding Cisco Systems or generate 26.9% 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. Bonterra Energy Corp
Performance |
| Timeline |
| Cisco Systems |
| Bonterra Energy Corp |
Cisco Systems and Bonterra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Bonterra Energy
The main advantage of trading using opposite Cisco Systems and Bonterra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Bonterra Energy 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 Bonterra Energy will offset losses from the drop in Bonterra Energy's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Bonterra Energy vs. Aminex PLC | Bonterra Energy vs. Questerre Energy | Bonterra Energy vs. FAR Limited | Bonterra Energy vs. PetroShale |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |