Correlation Between Cisco Systems and 2x Long

Can any of the company-specific risk be diversified away by investing in both Cisco Systems and 2x Long 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 2x Long into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cisco Systems and 2x Long VIX, you can compare the effects of market volatilities on Cisco Systems and 2x Long 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 2x Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and 2x Long.

Diversification Opportunities for Cisco Systems and 2x Long

-0.58

Correlation Coefficient

Cisco Systems  2x Long

Excellent diversification

The 3 months correlation between Cisco and UVIX is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and 2x Long VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2x Long VIX 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 2x Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2x Long VIX has no effect on the direction of Cisco Systems i.e., Cisco Systems and 2x Long go up and down completely randomly.

Pair Corralation between Cisco Systems and 2x Long

Given the investment horizon of 90 days Cisco Systems is expected to generate 0.19 times more return on investment than 2x Long. However, Cisco Systems is 5.13 times less risky than 2x Long. It trades about 0.06 of its potential returns per unit of risk. 2x Long VIX is currently generating about -0.14 per unit of risk. If you would invest  6,354  in Cisco Systems on May 18, 2025 and sell it today you would earn a total of  266.00  from holding Cisco Systems or generate 4.19% return on investment over 90 days.

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

Cisco Systems  vs.  2x Long VIX

Cisco Systems

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 4 (%) 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.

2x Long VIX

Risk-Adjusted Performance

Weakest

Over the last 90 days 2x Long VIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's forward indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Cisco Systems and 2x Long

The main advantage of trading using opposite Cisco Systems and 2x Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, 2x Long 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 2x Long will offset losses from the drop in 2x Long's long position.

The idea behind Cisco Systems and 2x Long VIX 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.