Correlation Between Cisco Systems and Lifestore Financial
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Lifestore Financial 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 Lifestore Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Lifestore Financial Group, you can compare the effects of market volatilities on Cisco Systems and Lifestore Financial 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 Lifestore Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Lifestore Financial.
Diversification Opportunities for Cisco Systems and Lifestore Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cisco and Lifestore is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Lifestore Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestore Financial 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 Lifestore Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestore Financial has no effect on the direction of Cisco Systems i.e., Cisco Systems and Lifestore Financial go up and down completely randomly.
Pair Corralation between Cisco Systems and Lifestore Financial
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.41 times more return on investment than Lifestore Financial. However, Cisco Systems is 2.43 times less risky than Lifestore Financial. It trades about 0.05 of its potential returns per unit of risk. Lifestore Financial Group is currently generating about 0.01 per unit of risk. If you would invest 4,525 in Cisco Systems on September 5, 2024 and sell it today you would earn a total of 1,423 from holding Cisco Systems or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.87% |
| Values | Daily Returns |
Cisco Systems vs. Lifestore Financial Group
Performance |
| Timeline |
| Cisco Systems |
| Lifestore Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and Lifestore Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Lifestore Financial
The main advantage of trading using opposite Cisco Systems and Lifestore Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Lifestore Financial 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 Lifestore Financial will offset losses from the drop in Lifestore Financial's long position.| Cisco Systems vs. Cambium Networks Corp | Cisco Systems vs. Knowles Cor | Cisco Systems vs. Ituran Location and | Cisco Systems vs. ADTRAN Inc |
| Lifestore Financial vs. NETGEAR | Lifestore Financial vs. Marfrig Global Foods | Lifestore Financial vs. Bridgford Foods | Lifestore Financial vs. Uber Technologies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |