Correlation Between Cisco Systems and Noble Rock
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Noble Rock 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 Noble Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Noble Rock Acquisition, you can compare the effects of market volatilities on Cisco Systems and Noble Rock 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 Noble Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Noble Rock.
Diversification Opportunities for Cisco Systems and Noble Rock
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cisco and Noble is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Noble Rock Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Rock Acquisition 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 Noble Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Rock Acquisition has no effect on the direction of Cisco Systems i.e., Cisco Systems and Noble Rock go up and down completely randomly.
Pair Corralation between Cisco Systems and Noble Rock
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 Together |
| Strength | Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Cisco Systems vs. Noble Rock Acquisition
Performance |
| Timeline |
| Cisco Systems |
| Noble Rock Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and Noble Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Noble Rock
The main advantage of trading using opposite Cisco Systems and Noble Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Noble Rock 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 Noble Rock will offset losses from the drop in Noble Rock's long position.| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor |
| Noble Rock vs. Embrace Change Acquisition | Noble Rock vs. Bannix Acquisition Corp | Noble Rock vs. Global Blockchain Acquisition |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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