Correlation Between Grab Holdings and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Grab Holdings and Cisco Systems 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 Grab Holdings and Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grab Holdings and Cisco Systems, you can compare the effects of market volatilities on Grab Holdings and Cisco Systems 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 Grab Holdings with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grab Holdings and Cisco Systems.
Diversification Opportunities for Grab Holdings and Cisco Systems
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grab and Cisco is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grab Holdings and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Grab Holdings 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 Grab Holdings are associated (or correlated) with Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Grab Holdings i.e., Grab Holdings and Cisco Systems go up and down completely randomly.
Pair Corralation between Grab Holdings and Cisco Systems
Given the investment horizon of 90 days Grab Holdings is expected to under-perform the Cisco Systems. In addition to that, Grab Holdings is 1.61 times more volatile than Cisco Systems. It trades about -0.02 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.13 per unit of volatility. If you would invest 5,880 in Cisco Systems on November 1, 2024 and sell it today you would earn a total of 207.50 from holding Cisco Systems or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grab Holdings vs. Cisco Systems
Performance |
| Timeline |
| Grab Holdings |
| Cisco Systems |
Grab Holdings and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grab Holdings and Cisco Systems
The main advantage of trading using opposite Grab Holdings and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grab Holdings position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Grab Holdings vs. LYFT Inc | Grab Holdings vs. Kingsoft Cloud Holdings | Grab Holdings vs. AMTD Digital | Grab Holdings vs. Uber Technologies |
| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor | Cisco Systems vs. Mynaric AG ADR |
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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