Correlation Between Cisco Systems and Express
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Express 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 Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Express, you can compare the effects of market volatilities on Cisco Systems and Express 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 Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Express.
Diversification Opportunities for Cisco Systems and Express
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Express is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Express 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 Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Express has no effect on the direction of Cisco Systems i.e., Cisco Systems and Express go up and down completely randomly.
Pair Corralation between Cisco Systems and Express
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.19 times more return on investment than Express. However, Cisco Systems is 5.3 times less risky than Express. It trades about 0.04 of its potential returns per unit of risk. Express is currently generating about -0.02 per unit of risk. If you would invest 4,635 in Cisco Systems on August 24, 2024 and sell it today you would earn a total of 1,188 from holding Cisco Systems or generate 25.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Cisco Systems vs. Express
Performance |
| Timeline |
| Cisco Systems |
| Express |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Express
The main advantage of trading using opposite Cisco Systems and Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Express 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 Express will offset losses from the drop in Express' long position.| Cisco Systems vs. Eshallgo Class A | Cisco Systems vs. Amtech Systems | Cisco Systems vs. Gold Fields Ltd | Cisco Systems vs. Aegean Airlines SA |
| Express vs. Koss Corporation | Express vs. BlackBerry | Express vs. Castor Maritime | Express vs. Clover Health Investments |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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