Correlation Between Cisco Systems and Gold
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Gold 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 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Gold And Gemstone, you can compare the effects of market volatilities on Cisco Systems and Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Gold.
Diversification Opportunities for Cisco Systems and Gold
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and Gold is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Gold And Gemstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Gemstone 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Gemstone has no effect on the direction of Cisco Systems i.e., Cisco Systems and Gold go up and down completely randomly.
Pair Corralation between Cisco Systems and Gold
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.47 times less return on investment than Gold. But when comparing it to its historical volatility, Cisco Systems is 5.09 times less risky than Gold. It trades about 0.11 of its potential returns per unit of risk. Gold And Gemstone is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.06 in Gold And Gemstone on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Gold And Gemstone or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cisco Systems vs. Gold And Gemstone
Performance |
| Timeline |
| Cisco Systems |
| Gold And Gemstone |
Cisco Systems and Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Gold
The main advantage of trading using opposite Cisco Systems and Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Gold 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 Gold will offset losses from the drop in Gold's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Gold vs. Brightrock Gold Corp | Gold vs. Mexus Gold Us | Gold vs. Platinum Group Metals | Gold vs. Buyer Group International |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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