Correlation Between DAX Index and Cisco Systems
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By analyzing existing cross correlation between DAX Index and Cisco Systems, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Cisco Systems.
Diversification Opportunities for DAX Index and Cisco Systems
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DAX and Cisco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Cisco Systems go up and down completely randomly.
Pair Corralation between DAX Index and Cisco Systems
Assuming the 90 days trading horizon DAX Index is expected to generate 2.05 times less return on investment than Cisco Systems. But when comparing it to its historical volatility, DAX Index is 1.64 times less risky than Cisco Systems. It trades about 0.17 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,918 in Cisco Systems on April 25, 2025 and sell it today you would earn a total of 939.00 from holding Cisco Systems or generate 19.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. Cisco Systems
Performance |
Timeline |
DAX Index and Cisco Systems Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Cisco Systems
Pair trading matchups for Cisco Systems
Pair Trading with DAX Index and Cisco Systems
The main advantage of trading using opposite DAX Index and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.DAX Index vs. Transport International Holdings | DAX Index vs. GOLDGROUP MINING INC | DAX Index vs. LION ONE METALS | DAX Index vs. SUPERNOVA METALS P |
Cisco Systems vs. ScanSource | Cisco Systems vs. BROADWIND ENRGY | Cisco Systems vs. Transportadora de Gas | Cisco Systems vs. Transport International Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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