Correlation Between Cisco Systems and SIMON

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

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

Diversification Opportunities for Cisco Systems and SIMON

-0.41

Correlation Coefficient

Cisco Systems  SIMON

Very good diversification

The 3 months correlation between Cisco and SIMON is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP 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 SIMON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMON PPTY GROUP has no effect on the direction of Cisco Systems i.e., Cisco Systems and SIMON go up and down completely randomly.

Pair Corralation between Cisco Systems and SIMON

Given the investment horizon of 90 days Cisco Systems is expected to generate 2.35 times less return on investment than SIMON. In addition to that, Cisco Systems is 1.24 times more volatile than SIMON PPTY GROUP. It trades about 0.08 of its total potential returns per unit of risk. SIMON PPTY GROUP is currently generating about 0.25 per unit of volatility. If you would invest  8,006  in SIMON PPTY GROUP on May 26, 2025 and sell it today you would earn a total of  592.00  from holding SIMON PPTY GROUP or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	47.62%
Values	Daily Returns

Cisco Systems  vs.  SIMON PPTY GROUP

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.

SIMON PPTY GROUP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SIMON PPTY GROUP are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SIMON sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cisco Systems and SIMON

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

The idea behind Cisco Systems and SIMON PPTY GROUP 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.