Correlation Between Cisco Systems and APPLE
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By analyzing existing cross correlation between Cisco Systems and APPLE INC, you can compare the effects of market volatilities on Cisco Systems and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and APPLE.
Diversification Opportunities for Cisco Systems and APPLE
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and APPLE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and APPLE go up and down completely randomly.
Pair Corralation between Cisco Systems and APPLE
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.75 times more return on investment than APPLE. However, Cisco Systems is 1.75 times more volatile than APPLE INC. It trades about 0.25 of its potential returns per unit of risk. APPLE INC is currently generating about 0.13 per unit of risk. If you would invest 6,023 in Cisco Systems on November 18, 2024 and sell it today you would earn a total of 464.00 from holding Cisco Systems or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. APPLE INC
Performance |
| Timeline |
| Cisco Systems |
| APPLE INC |
Cisco Systems and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and APPLE
The main advantage of trading using opposite Cisco Systems and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE'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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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