Correlation Between Cisco Systems and BAKER
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By analyzing existing cross correlation between Cisco Systems and BAKER HUGHES A, you can compare the effects of market volatilities on Cisco Systems and BAKER 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 BAKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and BAKER.
Diversification Opportunities for Cisco Systems and BAKER
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and BAKER is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Cisco Systems i.e., Cisco Systems and BAKER go up and down completely randomly.
Pair Corralation between Cisco Systems and BAKER
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.32 times more return on investment than BAKER. However, Cisco Systems is 1.32 times more volatile than BAKER HUGHES A. It trades about 0.16 of its potential returns per unit of risk. BAKER HUGHES A is currently generating about -0.09 per unit of risk. If you would invest 5,628 in Cisco Systems on August 24, 2024 and sell it today you would earn a total of 227.00 from holding Cisco Systems or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
Cisco Systems vs. BAKER HUGHES A
Performance |
| Timeline |
| Cisco Systems |
| BAKER HUGHES A |
Cisco Systems and BAKER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and BAKER
The main advantage of trading using opposite Cisco Systems and BAKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, BAKER 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 BAKER will offset losses from the drop in BAKER's long position.| Cisco Systems vs. Eshallgo Class A | Cisco Systems vs. Amtech Systems | Cisco Systems vs. Gold Fields Ltd | Cisco Systems vs. Aegean Airlines SA |
| BAKER vs. United Fire Group | BAKER vs. Doubledown Interactive Co | BAKER vs. Old Republic International | BAKER vs. NioCorp Developments Ltd |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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