Correlation Between Cisco Systems and White Gold
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and White Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cisco Systems and White Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and White Gold Corp, you can compare the effects of market volatilities on Cisco Systems and White Gold 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 White Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and White Gold.
Diversification Opportunities for Cisco Systems and White Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and White is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp 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 White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of Cisco Systems i.e., Cisco Systems and White Gold go up and down completely randomly.
Pair Corralation between Cisco Systems and White Gold
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.24 times more return on investment than White Gold. However, Cisco Systems is 4.13 times less risky than White Gold. It trades about 0.24 of its potential returns per unit of risk. White Gold Corp is currently generating about -0.16 per unit of risk. If you would invest 5,282 in Cisco Systems on August 29, 2024 and sell it today you would earn a total of 626.50 from holding Cisco Systems or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. White Gold Corp
Performance |
| Timeline |
| Cisco Systems |
| White Gold Corp |
Cisco Systems and White Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and White Gold
The main advantage of trading using opposite Cisco Systems and White Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, White Gold 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 White Gold will offset losses from the drop in White Gold's long position.| Cisco Systems vs. NETGEAR | Cisco Systems vs. Clearfield | Cisco Systems vs. ABIVAX Socit Anonyme | Cisco Systems vs. Morningstar Unconstrained Allocation |
| White Gold vs. Puma Exploration | White Gold vs. Endurance Gold | White Gold vs. Grande Portage Resources | White Gold vs. Altamira Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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