Correlation Between Cisco Systems and HONEYWELL
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By analyzing existing cross correlation between Cisco Systems and HONEYWELL INTL INC, you can compare the effects of market volatilities on Cisco Systems and HONEYWELL 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 HONEYWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and HONEYWELL.
Diversification Opportunities for Cisco Systems and HONEYWELL
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and HONEYWELL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and HONEYWELL INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTL INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and HONEYWELL go up and down completely randomly.
Pair Corralation between Cisco Systems and HONEYWELL
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.58 times more return on investment than HONEYWELL. However, Cisco Systems is 1.58 times more volatile than HONEYWELL INTL INC. It trades about 0.17 of its potential returns per unit of risk. HONEYWELL INTL INC is currently generating about 0.03 per unit of risk. If you would invest 4,538 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 1,336 from holding Cisco Systems or generate 29.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.2% |
| Values | Daily Returns |
Cisco Systems vs. HONEYWELL INTL INC
Performance |
| Timeline |
| Cisco Systems |
| HONEYWELL INTL INC |
Cisco Systems and HONEYWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and HONEYWELL
The main advantage of trading using opposite Cisco Systems and HONEYWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, HONEYWELL 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 HONEYWELL will offset losses from the drop in HONEYWELL's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
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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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