Correlation Between Cisco Systems and NETAPP
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By analyzing existing cross correlation between Cisco Systems and NETAPP INC, you can compare the effects of market volatilities on Cisco Systems and NETAPP 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 NETAPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and NETAPP.
Diversification Opportunities for Cisco Systems and NETAPP
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and NETAPP is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and NETAPP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETAPP 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 NETAPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETAPP INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and NETAPP go up and down completely randomly.
Pair Corralation between Cisco Systems and NETAPP
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.98 times more return on investment than NETAPP. However, Cisco Systems is 1.98 times more volatile than NETAPP INC. It trades about 0.17 of its potential returns per unit of risk. NETAPP INC is currently generating about -0.06 per unit of risk. If you would invest 4,590 in Cisco Systems on August 30, 2024 and sell it today you would earn a total of 1,339 from holding Cisco Systems or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Cisco Systems vs. NETAPP INC
Performance |
| Timeline |
| Cisco Systems |
| NETAPP INC |
Cisco Systems and NETAPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and NETAPP
The main advantage of trading using opposite Cisco Systems and NETAPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, NETAPP 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 NETAPP will offset losses from the drop in NETAPP'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 Transaction History module to view history of all your transactions and understand their impact on performance.
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