Correlation Between Cisco Systems and DIAGEO
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By analyzing existing cross correlation between Cisco Systems and DIAGEO CAP PLC, you can compare the effects of market volatilities on Cisco Systems and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and DIAGEO.
Diversification Opportunities for Cisco Systems and DIAGEO
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and DIAGEO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and DIAGEO CAP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAP PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAP PLC has no effect on the direction of Cisco Systems i.e., Cisco Systems and DIAGEO go up and down completely randomly.
Pair Corralation between Cisco Systems and DIAGEO
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.03 times more return on investment than DIAGEO. However, Cisco Systems is 1.03 times more volatile than DIAGEO CAP PLC. It trades about 0.27 of its potential returns per unit of risk. DIAGEO CAP PLC is currently generating about 0.02 per unit of risk. If you would invest 4,947 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 927.00 from holding Cisco Systems or generate 18.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.13% |
| Values | Daily Returns |
Cisco Systems vs. DIAGEO CAP PLC
Performance |
| Timeline |
| Cisco Systems |
| DIAGEO CAP PLC |
Cisco Systems and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and DIAGEO
The main advantage of trading using opposite Cisco Systems and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
| DIAGEO vs. The Coca Cola | DIAGEO vs. JPMorgan Chase Co | DIAGEO vs. Dupont De Nemours | DIAGEO vs. Alcoa 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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