Correlation Between Cisco Systems and KINDER
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By analyzing existing cross correlation between Cisco Systems and KINDER MORGAN ENERGY, you can compare the effects of market volatilities on Cisco Systems and KINDER 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 KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and KINDER.
Diversification Opportunities for Cisco Systems and KINDER
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and KINDER is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and KINDER MORGAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN ENERGY 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN ENERGY has no effect on the direction of Cisco Systems i.e., Cisco Systems and KINDER go up and down completely randomly.
Pair Corralation between Cisco Systems and KINDER
Given the investment horizon of 90 days Cisco Systems is expected to generate 115.76 times less return on investment than KINDER. But when comparing it to its historical volatility, Cisco Systems is 76.91 times less risky than KINDER. It trades about 0.06 of its potential returns per unit of risk. KINDER MORGAN ENERGY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,780 in KINDER MORGAN ENERGY on August 31, 2024 and sell it today you would earn a total of 465.00 from holding KINDER MORGAN ENERGY or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.58% |
| Values | Daily Returns |
Cisco Systems vs. KINDER MORGAN ENERGY
Performance |
| Timeline |
| Cisco Systems |
| KINDER MORGAN ENERGY |
Cisco Systems and KINDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and KINDER
The main advantage of trading using opposite Cisco Systems and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, KINDER 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 KINDER will offset losses from the drop in KINDER's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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