Correlation Between Cisco Systems and REYNOLDS
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By analyzing existing cross correlation between Cisco Systems and REYNOLDS AMERN INC, you can compare the effects of market volatilities on Cisco Systems and REYNOLDS 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 REYNOLDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and REYNOLDS.
Diversification Opportunities for Cisco Systems and REYNOLDS
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and REYNOLDS is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and REYNOLDS AMERN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REYNOLDS AMERN 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 REYNOLDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REYNOLDS AMERN INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and REYNOLDS go up and down completely randomly.
Pair Corralation between Cisco Systems and REYNOLDS
Given the investment horizon of 90 days Cisco Systems is expected to generate 2.56 times more return on investment than REYNOLDS. However, Cisco Systems is 2.56 times more volatile than REYNOLDS AMERN INC. It trades about 0.27 of its potential returns per unit of risk. REYNOLDS AMERN INC is currently generating about -0.18 per unit of risk. If you would invest 5,559 in Cisco Systems on August 31, 2024 and sell it today you would earn a total of 370.00 from holding Cisco Systems or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cisco Systems vs. REYNOLDS AMERN INC
Performance |
| Timeline |
| Cisco Systems |
| REYNOLDS AMERN INC |
Cisco Systems and REYNOLDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and REYNOLDS
The main advantage of trading using opposite Cisco Systems and REYNOLDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, REYNOLDS 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 REYNOLDS will offset losses from the drop in REYNOLDS's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| REYNOLDS vs. AEP TEX INC | REYNOLDS vs. US BANK NATIONAL | REYNOLDS vs. Bank of America | REYNOLDS vs. GE Aerospace |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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