Correlation Between Cisco Systems and MFS Active
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and MFS Active 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 MFS Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and MFS Active International, you can compare the effects of market volatilities on Cisco Systems and MFS Active 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 MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and MFS Active.
Diversification Opportunities for Cisco Systems and MFS Active
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cisco and MFS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and MFS Active International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active International 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 MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active International has no effect on the direction of Cisco Systems i.e., Cisco Systems and MFS Active go up and down completely randomly.
Pair Corralation between Cisco Systems and MFS Active
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.63 times more return on investment than MFS Active. However, Cisco Systems is 1.63 times more volatile than MFS Active International. It trades about 0.28 of its potential returns per unit of risk. MFS Active International is currently generating about 0.27 per unit of risk. If you would invest 5,637 in Cisco Systems on April 25, 2025 and sell it today you would earn a total of 1,179 from holding Cisco Systems or generate 20.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cisco Systems vs. MFS Active International
Performance |
Timeline |
Cisco Systems |
MFS Active International |
Cisco Systems and MFS Active Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cisco Systems and MFS Active
The main advantage of trading using opposite Cisco Systems and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, MFS Active 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 MFS Active will offset losses from the drop in MFS Active's long position.Cisco Systems vs. Ciena Corp | Cisco Systems vs. Hewlett Packard Enterprise | Cisco Systems vs. International Business Machines | Cisco Systems vs. Intel |
MFS Active vs. Strategy Shares | MFS Active vs. Freedom Day Dividend | MFS Active vs. Davis Select International | MFS Active vs. iShares MSCI China |
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.
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