Correlation Between Cisco Systems and SPECTRA
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By analyzing existing cross correlation between Cisco Systems and SPECTRA ENERGY PARTNERS, you can compare the effects of market volatilities on Cisco Systems and SPECTRA 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 SPECTRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and SPECTRA.
Diversification Opportunities for Cisco Systems and SPECTRA
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and SPECTRA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and SPECTRA ENERGY PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRA ENERGY PARTNERS 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 SPECTRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRA ENERGY PARTNERS has no effect on the direction of Cisco Systems i.e., Cisco Systems and SPECTRA go up and down completely randomly.
Pair Corralation between Cisco Systems and SPECTRA
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.14 times more return on investment than SPECTRA. However, Cisco Systems is 1.14 times more volatile than SPECTRA ENERGY PARTNERS. It trades about 0.2 of its potential returns per unit of risk. SPECTRA ENERGY PARTNERS is currently generating about -0.12 per unit of risk. If you would invest 5,212 in Cisco Systems on September 24, 2024 and sell it today you would earn a total of 686.00 from holding Cisco Systems or generate 13.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 72.31% |
Values | Daily Returns |
Cisco Systems vs. SPECTRA ENERGY PARTNERS
Performance |
Timeline |
Cisco Systems |
SPECTRA ENERGY PARTNERS |
Cisco Systems and SPECTRA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cisco Systems and SPECTRA
The main advantage of trading using opposite Cisco Systems and SPECTRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, SPECTRA 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 SPECTRA will offset losses from the drop in SPECTRA's long position.Cisco Systems vs. Desktop Metal | Cisco Systems vs. Fabrinet | Cisco Systems vs. Kimball Electronics | Cisco Systems vs. Knowles Cor |
SPECTRA vs. The Joint Corp | SPECTRA vs. Udemy Inc | SPECTRA vs. Western Asset Investment | SPECTRA vs. LENSAR Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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