Correlation Between Brera Holdings and Cisco Systems

Can any of the company-specific risk be diversified away by investing in both Brera 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 Brera 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 Brera Holdings PLC and Cisco Systems, you can compare the effects of market volatilities on Brera 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 Brera Holdings with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brera Holdings and Cisco Systems.

Diversification Opportunities for Brera Holdings and Cisco Systems

-0.5

Correlation Coefficient

Brera Holdings  Cisco Systems

Very good diversification

The 3 months correlation between Brera and Cisco is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Brera Holdings PLC and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Brera 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 Brera Holdings PLC 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 Brera Holdings i.e., Brera Holdings and Cisco Systems go up and down completely randomly.

Pair Corralation between Brera Holdings and Cisco Systems

Given the investment horizon of 90 days Brera Holdings PLC is expected to generate 7.81 times more return on investment than Cisco Systems. However, Brera Holdings is 7.81 times more volatile than Cisco Systems. It trades about 0.01 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.06 per unit of risk. If you would invest  83.00  in Brera Holdings PLC on December 27, 2024 and sell it today you would lose (12.00) from holding Brera Holdings PLC or give up 14.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Brera Holdings PLC  vs.  Cisco Systems

Brera Holdings PLC

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brera Holdings PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Brera Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cisco Systems

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Cisco Systems is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Brera Holdings and Cisco Systems

The main advantage of trading using opposite Brera Holdings and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brera 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.

The idea behind Brera Holdings PLC and Cisco Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.