Correlation Between Box and Cisco Systems

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

By analyzing existing cross correlation between Box Inc and Cisco Systems, you can compare the effects of market volatilities on Box 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 Box with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box and Cisco Systems.

Diversification Opportunities for Box and Cisco Systems

-0.42

Correlation Coefficient

Box  Cisco Systems

Very good diversification

The 3 months correlation between Box and Cisco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Box 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 Box Inc 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 Box i.e., Box and Cisco Systems go up and down completely randomly.

Pair Corralation between Box and Cisco Systems

Considering the 90-day investment horizon Box is expected to generate 3.38 times less return on investment than Cisco Systems. In addition to that, Box is 2.03 times more volatile than Cisco Systems. It trades about 0.01 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.09 per unit of volatility. If you would invest  6,282  in Cisco Systems on May 21, 2025 and sell it today you would earn a total of  413.00  from holding Cisco Systems or generate 6.57% return on investment over 90 days.

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

Box Inc  vs.  Cisco Systems

Box Inc

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Box Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cisco Systems

Risk-Adjusted Performance

Mild

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 unfluctuating fundamental indicators, Cisco Systems may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Box and Cisco Systems

The main advantage of trading using opposite Box and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Box 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 Box Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.