Correlation Between Cisco Systems and Medigus
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Medigus 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 Medigus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Medigus Ltd ADR, you can compare the effects of market volatilities on Cisco Systems and Medigus 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 Medigus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Medigus.
Diversification Opportunities for Cisco Systems and Medigus
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and Medigus is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Medigus Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigus Ltd ADR 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 Medigus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigus Ltd ADR has no effect on the direction of Cisco Systems i.e., Cisco Systems and Medigus go up and down completely randomly.
Pair Corralation between Cisco Systems and Medigus
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.26 times more return on investment than Medigus. However, Cisco Systems is 3.87 times less risky than Medigus. It trades about 0.17 of its potential returns per unit of risk. Medigus Ltd ADR is currently generating about -0.13 per unit of risk. If you would invest 4,590 in Cisco Systems on September 1, 2024 and sell it today you would earn a total of 1,331 from holding Cisco Systems or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 10.32% |
| Values | Daily Returns |
Cisco Systems vs. Medigus Ltd ADR
Performance |
| Timeline |
| Cisco Systems |
| Medigus Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and Medigus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Medigus
The main advantage of trading using opposite Cisco Systems and Medigus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Medigus 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 Medigus will offset losses from the drop in Medigus' long position.| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor |
| Medigus vs. Brainsway | Medigus vs. Delcath Systems | Medigus vs. Paragon 28 | Medigus vs. Nexalin Technology |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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