Correlation Between Cisco Systems and Newell
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By analyzing existing cross correlation between Cisco Systems and Newell Brands 42, you can compare the effects of market volatilities on Cisco Systems and Newell 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 Newell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Newell.
Diversification Opportunities for Cisco Systems and Newell
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and Newell is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Newell Brands 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 42 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 Newell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands 42 has no effect on the direction of Cisco Systems i.e., Cisco Systems and Newell go up and down completely randomly.
Pair Corralation between Cisco Systems and Newell
Given the investment horizon of 90 days Cisco Systems is expected to generate 2.01 times more return on investment than Newell. However, Cisco Systems is 2.01 times more volatile than Newell Brands 42. It trades about 0.16 of its potential returns per unit of risk. Newell Brands 42 is currently generating about -0.05 per unit of risk. If you would invest 4,666 in Cisco Systems on September 2, 2024 and sell it today you would earn a total of 1,255 from holding Cisco Systems or generate 26.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Cisco Systems vs. Newell Brands 42
Performance |
| Timeline |
| Cisco Systems |
| Newell Brands 42 |
Cisco Systems and Newell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Newell
The main advantage of trading using opposite Cisco Systems and Newell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Newell 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 Newell will offset losses from the drop in Newell'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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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