Correlation Between Cisco Systems and USCF ETF
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and USCF ETF 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 USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and USCF ETF Trust, you can compare the effects of market volatilities on Cisco Systems and USCF ETF 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 USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and USCF ETF.
Diversification Opportunities for Cisco Systems and USCF ETF
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cisco and USCF is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust 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 USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of Cisco Systems i.e., Cisco Systems and USCF ETF go up and down completely randomly.
Pair Corralation between Cisco Systems and USCF ETF
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.03 times more return on investment than USCF ETF. However, Cisco Systems is 1.03 times more volatile than USCF ETF Trust. It trades about 0.36 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.22 per unit of risk. If you would invest 5,477 in Cisco Systems on September 1, 2024 and sell it today you would earn a total of 444.00 from holding Cisco Systems or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cisco Systems vs. USCF ETF Trust
Performance |
| Timeline |
| Cisco Systems |
| USCF ETF Trust |
Cisco Systems and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and USCF ETF
The main advantage of trading using opposite Cisco Systems and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, USCF ETF 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 USCF ETF will offset losses from the drop in USCF ETF's long position.| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor |
| USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. Altrius Global Dividend | USCF ETF vs. Invesco Exchange Traded | USCF ETF vs. Franklin International Core |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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