Correlation Between Cisco Systems and ALTRIA
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By analyzing existing cross correlation between Cisco Systems and ALTRIA GROUP INC, you can compare the effects of market volatilities on Cisco Systems and ALTRIA 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 ALTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and ALTRIA.
Diversification Opportunities for Cisco Systems and ALTRIA
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and ALTRIA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP 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 ALTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTRIA GROUP INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and ALTRIA go up and down completely randomly.
Pair Corralation between Cisco Systems and ALTRIA
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.79 times more return on investment than ALTRIA. However, Cisco Systems is 1.79 times more volatile than ALTRIA GROUP INC. It trades about 0.06 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about 0.01 per unit of risk. If you would invest 4,741 in Cisco Systems on August 31, 2024 and sell it today you would earn a total of 1,180 from holding Cisco Systems or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Cisco Systems vs. ALTRIA GROUP INC
Performance |
| Timeline |
| Cisco Systems |
| ALTRIA GROUP INC |
Cisco Systems and ALTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and ALTRIA
The main advantage of trading using opposite Cisco Systems and ALTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, ALTRIA 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 ALTRIA will offset losses from the drop in ALTRIA's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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