Correlation Between Cisco Systems and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and KraneShares 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 KraneShares 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 KraneShares MSCI Emerging, you can compare the effects of market volatilities on Cisco Systems and KraneShares 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 KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and KraneShares MSCI.
Diversification Opportunities for Cisco Systems and KraneShares MSCI
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and KraneShares is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and KraneShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI Emerging 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 KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI Emerging has no effect on the direction of Cisco Systems i.e., Cisco Systems and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Cisco Systems and KraneShares MSCI
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.27 times more return on investment than KraneShares MSCI. However, Cisco Systems is 1.27 times more volatile than KraneShares MSCI Emerging. It trades about 0.12 of its potential returns per unit of risk. KraneShares MSCI Emerging is currently generating about 0.12 per unit of risk. If you would invest 5,870 in Cisco Systems on November 3, 2024 and sell it today you would earn a total of 190.00 from holding Cisco Systems or generate 3.24% 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. KraneShares MSCI Emerging
Performance |
| Timeline |
| Cisco Systems |
| KraneShares MSCI Emerging |
Cisco Systems and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and KraneShares MSCI
The main advantage of trading using opposite Cisco Systems and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, KraneShares 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 KraneShares MSCI will offset losses from the drop in KraneShares MSCI's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| KraneShares MSCI vs. KraneShares MSCI All | KraneShares MSCI vs. Columbia EM Core | KraneShares MSCI vs. KraneShares Emerging Markets | KraneShares MSCI vs. KraneShares MSCI One |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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