Correlation Between Cisco Systems and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and ProShares MSCI 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 ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and ProShares MSCI Europe, you can compare the effects of market volatilities on Cisco Systems and ProShares MSCI 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 ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and ProShares MSCI.
Diversification Opportunities for Cisco Systems and ProShares MSCI
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and ProShares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and ProShares MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Europe 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 ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Europe has no effect on the direction of Cisco Systems i.e., Cisco Systems and ProShares MSCI go up and down completely randomly.
Pair Corralation between Cisco Systems and ProShares MSCI
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.29 times more return on investment than ProShares MSCI. However, Cisco Systems is 1.29 times more volatile than ProShares MSCI Europe. It trades about 0.27 of its potential returns per unit of risk. ProShares MSCI Europe is currently generating about -0.23 per unit of risk. If you would invest 5,528 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 346.00 from holding Cisco Systems or generate 6.26% 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. ProShares MSCI Europe
Performance |
| Timeline |
| Cisco Systems |
| ProShares MSCI Europe |
Cisco Systems and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and ProShares MSCI
The main advantage of trading using opposite Cisco Systems and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
| ProShares MSCI vs. ProShares MSCI EAFE | ProShares MSCI vs. ProShares MSCI Emerging | ProShares MSCI vs. ProShares SP MidCap | ProShares MSCI vs. ProShares Russell 2000 |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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