Correlation Between Cisco Systems and CITIGROUP
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By analyzing existing cross correlation between Cisco Systems and CITIGROUP INC 37, you can compare the effects of market volatilities on Cisco Systems and CITIGROUP 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 CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and CITIGROUP.
Diversification Opportunities for Cisco Systems and CITIGROUP
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and CITIGROUP is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and CITIGROUP INC 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 37 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC 37 has no effect on the direction of Cisco Systems i.e., Cisco Systems and CITIGROUP go up and down completely randomly.
Pair Corralation between Cisco Systems and CITIGROUP
Given the investment horizon of 90 days Cisco Systems is expected to generate 5.69 times more return on investment than CITIGROUP. However, Cisco Systems is 5.69 times more volatile than CITIGROUP INC 37. It trades about 0.06 of its potential returns per unit of risk. CITIGROUP INC 37 is currently generating about 0.02 per unit of risk. If you would invest 4,739 in Cisco Systems on September 1, 2024 and sell it today you would earn a total of 1,182 from holding Cisco Systems or generate 24.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. CITIGROUP INC 37
Performance |
| Timeline |
| Cisco Systems |
| CITIGROUP INC 37 |
Cisco Systems and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and CITIGROUP
The main advantage of trading using opposite Cisco Systems and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. KVH Industries | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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