Correlation Between Cisco Systems and Comtech Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Comtech Telecommunicatio 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 Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Cisco Systems and Comtech Telecommunicatio 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 Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Comtech Telecommunicatio.
Diversification Opportunities for Cisco Systems and Comtech Telecommunicatio
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cisco and Comtech is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio 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 Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Cisco Systems i.e., Cisco Systems and Comtech Telecommunicatio go up and down completely randomly.
Pair Corralation between Cisco Systems and Comtech Telecommunicatio
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.17 times more return on investment than Comtech Telecommunicatio. However, Cisco Systems is 5.84 times less risky than Comtech Telecommunicatio. It trades about 0.06 of its potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about -0.03 per unit of risk. If you would invest 4,487 in Cisco Systems on November 5, 2024 and sell it today you would earn a total of 1,573 from holding Cisco Systems or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Comtech Telecommunications Cor
Performance |
| Timeline |
| Cisco Systems |
| Comtech Telecommunicatio |
Cisco Systems and Comtech Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Comtech Telecommunicatio
The main advantage of trading using opposite Cisco Systems and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Comtech Telecommunicatio 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 Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Comtech Telecommunicatio vs. KVH Industries | Comtech Telecommunicatio vs. Aviat Networks | Comtech Telecommunicatio vs. Harmonic | Comtech Telecommunicatio vs. Telesat 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |