Correlation Between Cisco Systems and CUMMINS
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By analyzing existing cross correlation between Cisco Systems and CUMMINS INC, you can compare the effects of market volatilities on Cisco Systems and CUMMINS 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 CUMMINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and CUMMINS.
Diversification Opportunities for Cisco Systems and CUMMINS
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and CUMMINS is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and CUMMINS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUMMINS 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 CUMMINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUMMINS INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and CUMMINS go up and down completely randomly.
Pair Corralation between Cisco Systems and CUMMINS
Given the investment horizon of 90 days Cisco Systems is expected to generate 37.57 times less return on investment than CUMMINS. But when comparing it to its historical volatility, Cisco Systems is 43.95 times less risky than CUMMINS. It trades about 0.06 of its potential returns per unit of risk. CUMMINS INC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,115 in CUMMINS INC on August 31, 2024 and sell it today you would earn a total of 20.00 from holding CUMMINS INC or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.99% |
| Values | Daily Returns |
Cisco Systems vs. CUMMINS INC
Performance |
| Timeline |
| Cisco Systems |
| CUMMINS INC |
Cisco Systems and CUMMINS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and CUMMINS
The main advantage of trading using opposite Cisco Systems and CUMMINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, CUMMINS 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 CUMMINS will offset losses from the drop in CUMMINS's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| CUMMINS vs. Fomento Economico Mexicano | CUMMINS vs. Willamette Valley Vineyards | CUMMINS vs. Anheuser Busch Inbev | CUMMINS vs. Oatly Group AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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