Correlation Between Cisco Systems and 963320AX4

Can any of the company-specific risk be diversified away by investing in both Cisco Systems and 963320AX4 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 963320AX4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cisco Systems and US963320AX45, you can compare the effects of market volatilities on Cisco Systems and 963320AX4 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 963320AX4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and 963320AX4.

Diversification Opportunities for Cisco Systems and 963320AX4

0.33

Correlation Coefficient

Cisco Systems  963320AX4

Weak diversification

The 3 months correlation between Cisco and 963320AX4 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and US963320AX45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US963320AX45 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 963320AX4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US963320AX45 has no effect on the direction of Cisco Systems i.e., Cisco Systems and 963320AX4 go up and down completely randomly.

Pair Corralation between Cisco Systems and 963320AX4

Given the investment horizon of 90 days Cisco Systems is expected to generate 1.06 times more return on investment than 963320AX4. However, Cisco Systems is 1.06 times more volatile than US963320AX45. It trades about 0.28 of its potential returns per unit of risk. US963320AX45 is currently generating about -0.07 per unit of risk. If you would invest  6,772  in Cisco Systems on July 31, 2025 and sell it today you would earn a total of  490.00  from holding Cisco Systems or generate 7.24% return on investment over 90 days.

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

Cisco Systems  vs.  US963320AX45

Cisco Systems

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 7 (%) 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 November 2025.

US963320AX45

Risk-Adjusted Performance

Weakest

Over the last 90 days US963320AX45 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 963320AX4 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cisco Systems and 963320AX4

The main advantage of trading using opposite Cisco Systems and 963320AX4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, 963320AX4 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 963320AX4 will offset losses from the drop in 963320AX4's long position.

The idea behind Cisco Systems and US963320AX45 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.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.