Correlation Between ClearOne and Cisco Systems

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

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

Diversification Opportunities for ClearOne and Cisco Systems

-0.01

Correlation Coefficient

ClearOne  Cisco Systems

Good diversification

The 3 months correlation between ClearOne and Cisco is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and ClearOne 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 ClearOne 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 ClearOne i.e., ClearOne and Cisco Systems go up and down completely randomly.

Pair Corralation between ClearOne and Cisco Systems

Given the investment horizon of 90 days ClearOne is expected to under-perform the Cisco Systems. In addition to that, ClearOne is 11.43 times more volatile than Cisco Systems. It trades about -0.03 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.17 per unit of volatility. If you would invest  6,388  in Cisco Systems on May 15, 2025 and sell it today you would earn a total of  750.00  from holding Cisco Systems or generate 11.74% return on investment over 90 days.

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

ClearOne  vs.  Cisco Systems

ClearOne

Risk-Adjusted Performance

Weakest

Over the last 90 days ClearOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cisco Systems

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 13 (%) 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 ClearOne and Cisco Systems

The main advantage of trading using opposite ClearOne and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearOne 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 ClearOne 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.