Correlation Between Cisco Systems and Grindr

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

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

Diversification Opportunities for Cisco Systems and Grindr

0.81

Correlation Coefficient

Cisco Systems  Grindr

Very poor diversification

The 3 months correlation between Cisco and Grindr is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Grindr Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindr Warrant 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 Grindr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindr Warrant has no effect on the direction of Cisco Systems i.e., Cisco Systems and Grindr go up and down completely randomly.

Pair Corralation between Cisco Systems and Grindr

Given the investment horizon of 90 days Cisco Systems is expected to generate 8.34 times less return on investment than Grindr. But when comparing it to its historical volatility, Cisco Systems is 4.69 times less risky than Grindr. It trades about 0.08 of its potential returns per unit of risk. Grindr Warrant is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  181.00  in Grindr Warrant on October 7, 2024 and sell it today you would earn a total of  494.00  from holding Grindr Warrant or generate 272.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	91.63%
Values	Daily Returns

Cisco Systems  vs.  Grindr Warrant

Cisco Systems

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Cisco Systems may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Grindr Warrant

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grindr Warrant are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Grindr unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cisco Systems and Grindr

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

The idea behind Cisco Systems and Grindr Warrant 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 Anywhere module to track or share privately all of your investments from the convenience of any device.