Correlation Between Cisco Systems and Qinetiq Group
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Qinetiq Group 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 Qinetiq Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Qinetiq Group PLC, you can compare the effects of market volatilities on Cisco Systems and Qinetiq Group 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 Qinetiq Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Qinetiq Group.
Diversification Opportunities for Cisco Systems and Qinetiq Group
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Qinetiq is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Qinetiq Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinetiq Group PLC 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 Qinetiq Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinetiq Group PLC has no effect on the direction of Cisco Systems i.e., Cisco Systems and Qinetiq Group go up and down completely randomly.
Pair Corralation between Cisco Systems and Qinetiq Group
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.33 times more return on investment than Qinetiq Group. However, Cisco Systems is 3.06 times less risky than Qinetiq Group. It trades about 0.29 of its potential returns per unit of risk. Qinetiq Group PLC is currently generating about -0.11 per unit of risk. If you would invest 5,583 in Cisco Systems on September 5, 2024 and sell it today you would earn a total of 365.00 from holding Cisco Systems or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Qinetiq Group PLC
Performance |
| Timeline |
| Cisco Systems |
| Qinetiq Group PLC |
Cisco Systems and Qinetiq Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Qinetiq Group
The main advantage of trading using opposite Cisco Systems and Qinetiq Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Qinetiq Group 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 Qinetiq Group will offset losses from the drop in Qinetiq Group'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 |
| Qinetiq Group vs. Rolls Royce Holdings PLC | Qinetiq Group vs. VirTra Inc | Qinetiq Group vs. BWX Technologies | Qinetiq Group vs. Embraer SA ADR |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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