Correlation Between Cisco Systems and AMP

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

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

Diversification Opportunities for Cisco Systems and AMP

0.0

Correlation Coefficient

Cisco Systems  AMP

Pay attention - limited upside

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

Pair Corralation between Cisco Systems and AMP

If you would invest  6,304  in Cisco Systems on May 20, 2025 and sell it today you would earn a total of  316.00  from holding Cisco Systems or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cisco Systems  vs.  AMP

Cisco Systems

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 5 (%) 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 recent stock price disarray, may contribute to short-term losses for the investors.

AMP

Risk-Adjusted Performance

Weakest

Over the last 90 days AMP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AMP 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 AMP

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

The idea behind Cisco Systems and AMP 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.