Correlation Between Cisco Systems and Entegris
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Entegris 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 Entegris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Entegris, you can compare the effects of market volatilities on Cisco Systems and Entegris 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 Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Entegris.
Diversification Opportunities for Cisco Systems and Entegris
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Entegris is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris 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 Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Cisco Systems i.e., Cisco Systems and Entegris go up and down completely randomly.
Pair Corralation between Cisco Systems and Entegris
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.42 times more return on investment than Entegris. However, Cisco Systems is 2.36 times less risky than Entegris. It trades about 0.26 of its potential returns per unit of risk. Entegris is currently generating about -0.05 per unit of risk. If you would invest 5,568 in Cisco Systems on August 30, 2024 and sell it today you would earn a total of 361.00 from holding Cisco Systems or generate 6.48% 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. Entegris
Performance |
| Timeline |
| Cisco Systems |
| Entegris |
Cisco Systems and Entegris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Entegris
The main advantage of trading using opposite Cisco Systems and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Entegris 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 Entegris will offset losses from the drop in Entegris' long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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