Correlation Between Cisco Systems and BlockchainK2 Corp

Can any of the company-specific risk be diversified away by investing in both Cisco Systems and BlockchainK2 Corp 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 BlockchainK2 Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cisco Systems and BlockchainK2 Corp, you can compare the effects of market volatilities on Cisco Systems and BlockchainK2 Corp 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 BlockchainK2 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and BlockchainK2 Corp.

Diversification Opportunities for Cisco Systems and BlockchainK2 Corp

-0.59

Correlation Coefficient

Cisco Systems  BlockchainK2 Corp

Excellent diversification

The 3 months correlation between Cisco and BlockchainK2 is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and BlockchainK2 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlockchainK2 Corp 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 BlockchainK2 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlockchainK2 Corp has no effect on the direction of Cisco Systems i.e., Cisco Systems and BlockchainK2 Corp go up and down completely randomly.

Pair Corralation between Cisco Systems and BlockchainK2 Corp

Given the investment horizon of 90 days Cisco Systems is expected to generate 58.27 times less return on investment than BlockchainK2 Corp. But when comparing it to its historical volatility, Cisco Systems is 41.17 times less risky than BlockchainK2 Corp. It trades about 0.08 of its potential returns per unit of risk. BlockchainK2 Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  20.00  in BlockchainK2 Corp on May 26, 2025 and sell it today you would lose (16.00) from holding BlockchainK2 Corp or give up 80.0% of portfolio value over 90 days.

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

Cisco Systems  vs.  BlockchainK2 Corp

Cisco Systems

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 6 (%) 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.

BlockchainK2 Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in BlockchainK2 Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, BlockchainK2 Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cisco Systems and BlockchainK2 Corp

The main advantage of trading using opposite Cisco Systems and BlockchainK2 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, BlockchainK2 Corp 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 BlockchainK2 Corp will offset losses from the drop in BlockchainK2 Corp's long position.

The idea behind Cisco Systems and BlockchainK2 Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.