Correlation Between Cisco Systems and Tupperware Brands
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Tupperware Brands 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 Tupperware Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Tupperware Brands, you can compare the effects of market volatilities on Cisco Systems and Tupperware Brands 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 Tupperware Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Tupperware Brands.
Diversification Opportunities for Cisco Systems and Tupperware Brands
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Tupperware is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Tupperware Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tupperware Brands 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 Tupperware Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tupperware Brands has no effect on the direction of Cisco Systems i.e., Cisco Systems and Tupperware Brands go up and down completely randomly.
Pair Corralation between Cisco Systems and Tupperware Brands
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.11 times more return on investment than Tupperware Brands. However, Cisco Systems is 8.87 times less risky than Tupperware Brands. It trades about 0.05 of its potential returns per unit of risk. Tupperware Brands is currently generating about -0.02 per unit of risk. If you would invest 4,633 in Cisco Systems on September 2, 2024 and sell it today you would earn a total of 1,288 from holding Cisco Systems or generate 27.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.72% |
| Values | Daily Returns |
Cisco Systems vs. Tupperware Brands
Performance |
| Timeline |
| Cisco Systems |
| Tupperware Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and Tupperware Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Tupperware Brands
The main advantage of trading using opposite Cisco Systems and Tupperware Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Tupperware Brands 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 Tupperware Brands will offset losses from the drop in Tupperware Brands' long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| Tupperware Brands vs. Millennium Group International | Tupperware Brands vs. Sonoco Products | Tupperware Brands vs. Sealed Air | Tupperware Brands vs. Alliance Creative Gr |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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