Correlation Between Cisco Systems and AMERICAN
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By analyzing existing cross correlation between Cisco Systems and AMERICAN INTL GROUP, you can compare the effects of market volatilities on Cisco Systems and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and AMERICAN.
Diversification Opportunities for Cisco Systems and AMERICAN
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and AMERICAN is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and AMERICAN INTL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN INTL GROUP 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN INTL GROUP has no effect on the direction of Cisco Systems i.e., Cisco Systems and AMERICAN go up and down completely randomly.
Pair Corralation between Cisco Systems and AMERICAN
Given the investment horizon of 90 days Cisco Systems is expected to generate 3.27 times more return on investment than AMERICAN. However, Cisco Systems is 3.27 times more volatile than AMERICAN INTL GROUP. It trades about 0.06 of its potential returns per unit of risk. AMERICAN INTL GROUP 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 | Very Weak |
| Accuracy | 93.58% |
| Values | Daily Returns |
Cisco Systems vs. AMERICAN INTL GROUP
Performance |
| Timeline |
| Cisco Systems |
| AMERICAN INTL GROUP |
Cisco Systems and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and AMERICAN
The main advantage of trading using opposite Cisco Systems and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| AMERICAN vs. Analog Devices | AMERICAN vs. Ambev SA ADR | AMERICAN vs. Valneva SE ADR | AMERICAN vs. Keurig Dr Pepper |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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