Correlation Between Cisco Systems and IMedia Brands
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and IMedia Brands 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 IMedia Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and IMedia Brands, you can compare the effects of market volatilities on Cisco Systems and IMedia Brands 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 IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and IMedia Brands.
Diversification Opportunities for Cisco Systems and IMedia Brands
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and IMedia is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and IMedia Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands 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 IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands has no effect on the direction of Cisco Systems i.e., Cisco Systems and IMedia Brands go up and down completely randomly.
Pair Corralation between Cisco Systems and IMedia Brands
If you would invest 4,925 in Cisco Systems on September 3, 2024 and sell it today you would earn a total of 996.00 from holding Cisco Systems or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.44% |
| Values | Daily Returns |
Cisco Systems vs. IMedia Brands
Performance |
| Timeline |
| Cisco Systems |
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and IMedia Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and IMedia Brands
The main advantage of trading using opposite Cisco Systems and IMedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, IMedia Brands 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 IMedia Brands will offset losses from the drop in IMedia Brands' long position.| Cisco Systems vs. Highway Holdings Limited | Cisco Systems vs. QCR Holdings | Cisco Systems vs. Partner Communications | Cisco Systems vs. Acumen Pharmaceuticals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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