Correlation Between Cisco Systems and Dws Money

Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Dws Money 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 Dws Money into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cisco Systems and Dws Money Market, you can compare the effects of market volatilities on Cisco Systems and Dws Money 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 Dws Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Dws Money.

Diversification Opportunities for Cisco Systems and Dws Money

0.14

Correlation Coefficient

Cisco Systems  Dws Money

Average diversification

The 3 months correlation between Cisco and Dws is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Dws Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Money Market 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 Dws Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Money Market has no effect on the direction of Cisco Systems i.e., Cisco Systems and Dws Money go up and down completely randomly.

Pair Corralation between Cisco Systems and Dws Money

If you would invest  5,961  in Cisco Systems on December 5, 2024 and sell it today you would earn a total of  365.00  from holding Cisco Systems or generate 6.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Cisco Systems  vs.  Dws Money Market

Cisco Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Cisco Systems may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dws Money Market

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dws Money Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dws Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cisco Systems and Dws Money

The main advantage of trading using opposite Cisco Systems and Dws Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Dws Money 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 Dws Money will offset losses from the drop in Dws Money's long position.

The idea behind Cisco Systems and Dws Money Market 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.