Correlation Between Cisco Systems and Close Brothers
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Close Brothers 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 Close Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Close Brothers Group, you can compare the effects of market volatilities on Cisco Systems and Close Brothers 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 Close Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Close Brothers.
Diversification Opportunities for Cisco Systems and Close Brothers
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and Close is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Close Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Close Brothers Group 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 Close Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Close Brothers Group has no effect on the direction of Cisco Systems i.e., Cisco Systems and Close Brothers go up and down completely randomly.
Pair Corralation between Cisco Systems and Close Brothers
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.29 times more return on investment than Close Brothers. However, Cisco Systems is 3.4 times less risky than Close Brothers. It trades about 0.27 of its potential returns per unit of risk. Close Brothers Group is currently generating about -0.22 per unit of risk. If you would invest 5,559 in Cisco Systems on August 31, 2024 and sell it today you would earn a total of 370.00 from holding Cisco Systems or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Close Brothers Group
Performance |
| Timeline |
| Cisco Systems |
| Close Brothers Group |
Cisco Systems and Close Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Close Brothers
The main advantage of trading using opposite Cisco Systems and Close Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Close Brothers 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 Close Brothers will offset losses from the drop in Close Brothers' long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Close Brothers vs. Peoples Bancorp | Close Brothers vs. Primis Financial Corp | Close Brothers vs. ConnectOne Bancorp | Close Brothers vs. LINKBANCORP |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |