Correlation Between Cisco Systems and Bolloré SE
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Bolloré SE 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 Bolloré SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Bollor SE, you can compare the effects of market volatilities on Cisco Systems and Bolloré SE 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 Bolloré SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Bolloré SE.
Diversification Opportunities for Cisco Systems and Bolloré SE
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Bolloré is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE 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 Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of Cisco Systems i.e., Cisco Systems and Bolloré SE go up and down completely randomly.
Pair Corralation between Cisco Systems and Bolloré SE
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.54 times more return on investment than Bolloré SE. However, Cisco Systems is 1.86 times less risky than Bolloré SE. It trades about 0.27 of its potential returns per unit of risk. Bollor SE is currently generating about -0.01 per unit of risk. If you would invest 4,968 in Cisco Systems on September 2, 2024 and sell it today you would earn a total of 953.00 from holding Cisco Systems or generate 19.18% 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. Bollor SE
Performance |
| Timeline |
| Cisco Systems |
| Bolloré SE |
Cisco Systems and Bolloré SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Bolloré SE
The main advantage of trading using opposite Cisco Systems and Bolloré SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Bolloré SE 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 Bolloré SE will offset losses from the drop in Bolloré SE's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Bolloré SE vs. Universal Music Group | Bolloré SE vs. Universal Media Group | Bolloré SE vs. Reading International | Bolloré SE vs. Warner Music Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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