Correlation Between Cisco Systems and METLIFE
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By analyzing existing cross correlation between Cisco Systems and METLIFE INC 36, you can compare the effects of market volatilities on Cisco Systems and METLIFE 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 METLIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and METLIFE.
Diversification Opportunities for Cisco Systems and METLIFE
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and METLIFE is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and METLIFE INC 36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METLIFE INC 36 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 METLIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METLIFE INC 36 has no effect on the direction of Cisco Systems i.e., Cisco Systems and METLIFE go up and down completely randomly.
Pair Corralation between Cisco Systems and METLIFE
Given the investment horizon of 90 days Cisco Systems is expected to generate 4.29 times more return on investment than METLIFE. However, Cisco Systems is 4.29 times more volatile than METLIFE INC 36. It trades about 0.05 of its potential returns per unit of risk. METLIFE INC 36 is currently generating about -0.01 per unit of risk. If you would invest 4,447 in Cisco Systems on September 12, 2024 and sell it today you would earn a total of 1,425 from holding Cisco Systems or generate 32.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.78% |
Values | Daily Returns |
Cisco Systems vs. METLIFE INC 36
Performance |
Timeline |
Cisco Systems |
METLIFE INC 36 |
Cisco Systems and METLIFE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cisco Systems and METLIFE
The main advantage of trading using opposite Cisco Systems and METLIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, METLIFE 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 METLIFE will offset losses from the drop in METLIFE's long position.Cisco Systems vs. Victory Integrity Smallmid Cap | Cisco Systems vs. Hilton Worldwide Holdings | Cisco Systems vs. NVIDIA | Cisco Systems vs. JPMorgan Chase Co |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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