Correlation Between Cisco Systems and Harbor Capital

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

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

Diversification Opportunities for Cisco Systems and Harbor Capital

-0.42

Correlation Coefficient

Cisco Systems  Harbor Capital

Very good diversification

The 3 months correlation between Cisco and Harbor is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Harbor Capital Advisors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Capital Advisors 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 Harbor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Capital Advisors has no effect on the direction of Cisco Systems i.e., Cisco Systems and Harbor Capital go up and down completely randomly.

Pair Corralation between Cisco Systems and Harbor Capital

If you would invest  5,957  in Cisco Systems on October 27, 2024 and sell it today you would earn a total of  266.00  from holding Cisco Systems or generate 4.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Cisco Systems  vs.  Harbor Capital Advisors

Cisco Systems

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Cisco Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Harbor Capital Advisors

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Harbor Capital Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent basic indicators, Harbor Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cisco Systems and Harbor Capital

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

The idea behind Cisco Systems and Harbor Capital Advisors 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.