Correlation Between Tutor Perini and Cisco Systems

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

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

Diversification Opportunities for Tutor Perini and Cisco Systems

0.95

Correlation Coefficient

Tutor Perini  Cisco Systems

Almost no diversification

The 3 months correlation between Tutor and Cisco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Tutor Perini and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Tutor Perini 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 Tutor Perini are associated (or correlated) with Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Tutor Perini i.e., Tutor Perini and Cisco Systems go up and down completely randomly.

Pair Corralation between Tutor Perini and Cisco Systems

Considering the 90-day investment horizon Tutor Perini is expected to generate 1.98 times more return on investment than Cisco Systems. However, Tutor Perini is 1.98 times more volatile than Cisco Systems. It trades about 0.34 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.21 per unit of risk. If you would invest  2,987  in Tutor Perini on May 8, 2025 and sell it today you would earn a total of  1,779  from holding Tutor Perini or generate 59.56% return on investment over 90 days.

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

Tutor Perini  vs.  Cisco Systems

Tutor Perini

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Tutor Perini are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Tutor Perini exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cisco Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Cisco Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tutor Perini and Cisco Systems

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

The idea behind Tutor Perini and Cisco Systems 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 Commodity Directory module to find actively traded commodities issued by global exchanges.