Correlation Between Cisco Systems and NFT Gaming

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

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

Diversification Opportunities for Cisco Systems and NFT Gaming

0.0

Correlation Coefficient

Cisco Systems  NFT Gaming

Pay attention - limited upside

The 3 months correlation between Cisco and NFT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and The NFT Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFT Gaming 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 NFT Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFT Gaming has no effect on the direction of Cisco Systems i.e., Cisco Systems and NFT Gaming go up and down completely randomly.

Pair Corralation between Cisco Systems and NFT Gaming

Given the investment horizon of 90 days Cisco Systems is expected to generate 0.1 times more return on investment than NFT Gaming. However, Cisco Systems is 10.51 times less risky than NFT Gaming. It trades about 0.06 of its potential returns per unit of risk. The NFT Gaming is currently generating about -0.07 per unit of risk. If you would invest  4,575  in Cisco Systems on October 25, 2024 and sell it today you would earn a total of  1,588  from holding Cisco Systems or generate 34.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	22.31%
Values	Daily Returns

Cisco Systems  vs.  The NFT Gaming

Cisco Systems

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Cisco Systems may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NFT Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The NFT Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NFT Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cisco Systems and NFT Gaming

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

The idea behind Cisco Systems and The NFT Gaming 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.