Correlation Between Cisco Systems and NOVARTIS
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By analyzing existing cross correlation between Cisco Systems and NOVARTIS CAP P, you can compare the effects of market volatilities on Cisco Systems and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and NOVARTIS.
Diversification Opportunities for Cisco Systems and NOVARTIS
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and NOVARTIS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and NOVARTIS CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAP P 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAP P has no effect on the direction of Cisco Systems i.e., Cisco Systems and NOVARTIS go up and down completely randomly.
Pair Corralation between Cisco Systems and NOVARTIS
Given the investment horizon of 90 days Cisco Systems is expected to generate 60.09 times less return on investment than NOVARTIS. But when comparing it to its historical volatility, Cisco Systems is 55.73 times less risky than NOVARTIS. It trades about 0.05 of its potential returns per unit of risk. NOVARTIS CAP P is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,269 in NOVARTIS CAP P on November 9, 2024 and sell it today you would earn a total of 8.00 from holding NOVARTIS CAP P or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.31% |
| Values | Daily Returns |
Cisco Systems vs. NOVARTIS CAP P
Performance |
| Timeline |
| Cisco Systems |
| NOVARTIS CAP P |
Cisco Systems and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and NOVARTIS
The main advantage of trading using opposite Cisco Systems and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.| Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Extreme Networks | Cisco Systems vs. Clearfield | Cisco Systems vs. Great Western Minerals |
| NOVARTIS vs. Ziff Davis | NOVARTIS vs. United Guardian | NOVARTIS vs. Space Communication | NOVARTIS vs. Weibo 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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