Correlation Between Cisco Systems and BAIDU
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By analyzing existing cross correlation between Cisco Systems and BAIDU INC 4125, you can compare the effects of market volatilities on Cisco Systems and BAIDU 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 BAIDU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and BAIDU.
Diversification Opportunities for Cisco Systems and BAIDU
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cisco and BAIDU is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and BAIDU INC 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIDU INC 4125 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 BAIDU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIDU INC 4125 has no effect on the direction of Cisco Systems i.e., Cisco Systems and BAIDU go up and down completely randomly.
Pair Corralation between Cisco Systems and BAIDU
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.73 times more return on investment than BAIDU. However, Cisco Systems is 1.73 times more volatile than BAIDU INC 4125. It trades about 0.26 of its potential returns per unit of risk. BAIDU INC 4125 is currently generating about 0.0 per unit of risk. If you would invest 5,568 in Cisco Systems on August 30, 2024 and sell it today you would earn a total of 361.00 from holding Cisco Systems or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 18.18% |
| Values | Daily Returns |
Cisco Systems vs. BAIDU INC 4125
Performance |
| Timeline |
| Cisco Systems |
| BAIDU INC 4125 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and BAIDU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and BAIDU
The main advantage of trading using opposite Cisco Systems and BAIDU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, BAIDU 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 BAIDU will offset losses from the drop in BAIDU's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| BAIDU vs. Scandinavian Tobacco Group | BAIDU vs. Vita Coco | BAIDU vs. Compania Cervecerias Unidas | BAIDU vs. Waste Management |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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