Correlation Between Cisco Systems and ACADIA
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By analyzing existing cross correlation between Cisco Systems and ACADIA HEALTHCARE INC, you can compare the effects of market volatilities on Cisco Systems and ACADIA 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 ACADIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and ACADIA.
Diversification Opportunities for Cisco Systems and ACADIA
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and ACADIA is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and ACADIA HEALTHCARE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACADIA HEALTHCARE INC 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 ACADIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACADIA HEALTHCARE INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and ACADIA go up and down completely randomly.
Pair Corralation between Cisco Systems and ACADIA
Given the investment horizon of 90 days Cisco Systems is expected to generate 42.95 times less return on investment than ACADIA. But when comparing it to its historical volatility, Cisco Systems is 64.47 times less risky than ACADIA. It trades about 0.1 of its potential returns per unit of risk. ACADIA HEALTHCARE INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,450 in ACADIA HEALTHCARE INC on August 27, 2024 and sell it today you would lose (161.00) from holding ACADIA HEALTHCARE INC or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.49% |
| Values | Daily Returns |
Cisco Systems vs. ACADIA HEALTHCARE INC
Performance |
| Timeline |
| Cisco Systems |
| ACADIA HEALTHCARE INC |
Cisco Systems and ACADIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and ACADIA
The main advantage of trading using opposite Cisco Systems and ACADIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, ACADIA 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 ACADIA will offset losses from the drop in ACADIA's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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