Correlation Between Cisco Systems and LENNAR
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By analyzing existing cross correlation between Cisco Systems and LENNAR P 5, you can compare the effects of market volatilities on Cisco Systems and LENNAR 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 LENNAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and LENNAR.
Diversification Opportunities for Cisco Systems and LENNAR
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and LENNAR is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and LENNAR P 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENNAR P 5 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 LENNAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENNAR P 5 has no effect on the direction of Cisco Systems i.e., Cisco Systems and LENNAR go up and down completely randomly.
Pair Corralation between Cisco Systems and LENNAR
Given the investment horizon of 90 days Cisco Systems is expected to generate 2.05 times more return on investment than LENNAR. However, Cisco Systems is 2.05 times more volatile than LENNAR P 5. It trades about 0.24 of its potential returns per unit of risk. LENNAR P 5 is currently generating about -0.23 per unit of risk. If you would invest 5,262 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 612.00 from holding Cisco Systems or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Cisco Systems vs. LENNAR P 5
Performance |
| Timeline |
| Cisco Systems |
| LENNAR P 5 |
Cisco Systems and LENNAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and LENNAR
The main advantage of trading using opposite Cisco Systems and LENNAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, LENNAR 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 LENNAR will offset losses from the drop in LENNAR's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
| LENNAR vs. The Coca Cola | LENNAR vs. JPMorgan Chase Co | LENNAR vs. Dupont De Nemours | LENNAR 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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