Correlation Between Cisco Systems and KraneShares Asia
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and KraneShares Asia 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 Asia 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 Asia Pacific, you can compare the effects of market volatilities on Cisco Systems and KraneShares Asia 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 Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and KraneShares Asia.
Diversification Opportunities for Cisco Systems and KraneShares Asia
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cisco and KraneShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and KraneShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Asia Pacific 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 Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Asia Pacific has no effect on the direction of Cisco Systems i.e., Cisco Systems and KraneShares Asia go up and down completely randomly.
Pair Corralation between Cisco Systems and KraneShares Asia
Given the investment horizon of 90 days Cisco Systems is expected to generate 5.15 times more return on investment than KraneShares Asia. However, Cisco Systems is 5.15 times more volatile than KraneShares Asia Pacific. It trades about 0.08 of its potential returns per unit of risk. KraneShares Asia Pacific is currently generating about 0.23 per unit of risk. If you would invest 4,783 in Cisco Systems on September 4, 2024 and sell it today you would earn a total of 1,165 from holding Cisco Systems or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. KraneShares Asia Pacific
Performance |
| Timeline |
| Cisco Systems |
| KraneShares Asia Pacific |
Cisco Systems and KraneShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and KraneShares Asia
The main advantage of trading using opposite Cisco Systems and KraneShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, KraneShares Asia 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 Asia will offset losses from the drop in KraneShares Asia's long position.| Cisco Systems vs. Cambium Networks Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Knowles Cor | Cisco Systems vs. Ituran Location and |
| KraneShares Asia vs. iShares iBoxx Investment | KraneShares Asia vs. iShares iBoxx High | KraneShares Asia vs. iShares National Muni | KraneShares Asia vs. Invesco Emerging Markets |
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.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |