Correlation Between Cisco Systems and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Wasatch Emerging 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 Wasatch Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Wasatch Emerging Markets, you can compare the effects of market volatilities on Cisco Systems and Wasatch Emerging 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 Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Wasatch Emerging.
Diversification Opportunities for Cisco Systems and Wasatch Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cisco and Wasatch is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging Markets 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 Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Cisco Systems i.e., Cisco Systems and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Cisco Systems and Wasatch Emerging
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.43 times more return on investment than Wasatch Emerging. However, Cisco Systems is 1.43 times more volatile than Wasatch Emerging Markets. It trades about 0.24 of its potential returns per unit of risk. Wasatch Emerging Markets is currently generating about 0.27 per unit of risk. If you would invest 5,707 in Cisco Systems on April 13, 2025 and sell it today you would earn a total of 1,088 from holding Cisco Systems or generate 19.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Wasatch Emerging Markets
Performance |
| Timeline |
| Cisco Systems |
| Wasatch Emerging Markets |
Cisco Systems and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Wasatch Emerging
The main advantage of trading using opposite Cisco Systems and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Wasatch Emerging 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.| Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp | Cisco Systems vs. Telefonaktiebolaget LM Ericsson |
| Wasatch Emerging vs. Wasatch International Opportunities | Wasatch Emerging vs. Wasatch International Growth | Wasatch Emerging vs. Wasatch Frontier Emerging | Wasatch Emerging vs. Wasatch Micro Cap |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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