Correlation Between Cisco Systems and Silver Elephant
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Silver Elephant 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 Silver Elephant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Silver Elephant Mining, you can compare the effects of market volatilities on Cisco Systems and Silver Elephant 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 Silver Elephant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Silver Elephant.
Diversification Opportunities for Cisco Systems and Silver Elephant
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and Silver is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining 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 Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of Cisco Systems i.e., Cisco Systems and Silver Elephant go up and down completely randomly.
Pair Corralation between Cisco Systems and Silver Elephant
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.2 times more return on investment than Silver Elephant. However, Cisco Systems is 5.02 times less risky than Silver Elephant. It trades about 0.12 of its potential returns per unit of risk. Silver Elephant Mining is currently generating about -0.15 per unit of risk. If you would invest 5,877 in Cisco Systems on November 5, 2024 and sell it today you would earn a total of 183.00 from holding Cisco Systems or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cisco Systems vs. Silver Elephant Mining
Performance |
| Timeline |
| Cisco Systems |
| Silver Elephant Mining |
Cisco Systems and Silver Elephant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Silver Elephant
The main advantage of trading using opposite Cisco Systems and Silver Elephant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Silver Elephant 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 Silver Elephant will offset losses from the drop in Silver Elephant's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Silver Elephant vs. Commerce Resources Corp | Silver Elephant vs. Great Western Minerals | Silver Elephant vs. StrikePoint Gold | Silver Elephant vs. Eskay Mining Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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