Correlation Between Cisco Systems and JPMorgan ETFs
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and JPMorgan ETFs 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 JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on Cisco Systems and JPMorgan ETFs 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 JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and JPMorgan ETFs.
Diversification Opportunities for Cisco Systems and JPMorgan ETFs
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cisco and JPMorgan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV 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 JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of Cisco Systems i.e., Cisco Systems and JPMorgan ETFs go up and down completely randomly.
Pair Corralation between Cisco Systems and JPMorgan ETFs
Given the investment horizon of 90 days Cisco Systems is expected to generate 8.77 times more return on investment than JPMorgan ETFs. However, Cisco Systems is 8.77 times more volatile than JPMorgan ETFs ICAV. It trades about 0.26 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about 0.13 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 Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cisco Systems vs. JPMorgan ETFs ICAV
Performance |
| Timeline |
| Cisco Systems |
| JPMorgan ETFs ICAV |
Cisco Systems and JPMorgan ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and JPMorgan ETFs
The main advantage of trading using opposite Cisco Systems and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, JPMorgan ETFs 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 JPMorgan ETFs will offset losses from the drop in JPMorgan ETFs' long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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