Correlation Between Cisco Systems and Invesco Actively
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Invesco Actively 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 Invesco Actively into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Invesco Actively Managed, you can compare the effects of market volatilities on Cisco Systems and Invesco Actively 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 Invesco Actively. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Invesco Actively.
Diversification Opportunities for Cisco Systems and Invesco Actively
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cisco and Invesco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Invesco Actively Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Actively Managed 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 Invesco Actively. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Actively Managed has no effect on the direction of Cisco Systems i.e., Cisco Systems and Invesco Actively go up and down completely randomly.
Pair Corralation between Cisco Systems and Invesco Actively
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.97 times more return on investment than Invesco Actively. However, Cisco Systems is 1.97 times more volatile than Invesco Actively Managed. It trades about 0.17 of its potential returns per unit of risk. Invesco Actively Managed is currently generating about 0.14 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 Together |
| Strength | Very Strong |
| Accuracy | 76.98% |
| Values | Daily Returns |
Cisco Systems vs. Invesco Actively Managed
Performance |
| Timeline |
| Cisco Systems |
| Invesco Actively Managed |
Cisco Systems and Invesco Actively Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Invesco Actively
The main advantage of trading using opposite Cisco Systems and Invesco Actively positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Invesco Actively 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 Invesco Actively will offset losses from the drop in Invesco Actively's long position.| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor |
| Invesco Actively vs. FT Vest Equity | Invesco Actively vs. Northern Lights | Invesco Actively vs. Dimensional International High | Invesco Actively vs. Matthews China Discovery |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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