Correlation Between Cisco Systems and Spot Coffee
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Spot Coffee 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 Spot Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Spot Coffee, you can compare the effects of market volatilities on Cisco Systems and Spot Coffee 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 Spot Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Spot Coffee.
Diversification Opportunities for Cisco Systems and Spot Coffee
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cisco and Spot is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Spot Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spot Coffee 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 Spot Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spot Coffee has no effect on the direction of Cisco Systems i.e., Cisco Systems and Spot Coffee go up and down completely randomly.
Pair Corralation between Cisco Systems and Spot Coffee
Given the investment horizon of 90 days Cisco Systems is expected to generate 10.72 times less return on investment than Spot Coffee. But when comparing it to its historical volatility, Cisco Systems is 38.67 times less risky than Spot Coffee. It trades about 0.3 of its potential returns per unit of risk. Spot Coffee is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.54 in Spot Coffee on December 1, 2024 and sell it today you would lose (0.31) from holding Spot Coffee or give up 57.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Spot Coffee
Performance |
| Timeline |
| Cisco Systems |
| Spot Coffee |
Cisco Systems and Spot Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Spot Coffee
The main advantage of trading using opposite Cisco Systems and Spot Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Spot Coffee 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 Spot Coffee will offset losses from the drop in Spot Coffee's long position.| Cisco Systems vs. Mynaric AG ADR | Cisco Systems vs. KVH Industries | Cisco Systems vs. Telesat Corp | Cisco Systems vs. Digi International |
| Spot Coffee vs. Alsea SAB de | Spot Coffee vs. Marstons PLC | Spot Coffee vs. Bagger Daves Burger | Spot Coffee vs. Marstons PLC |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |