Correlation Between Cisco Systems and ProShares

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

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

Diversification Opportunities for Cisco Systems and ProShares

0.0

Correlation Coefficient

Cisco Systems  ProShares

Pay attention - limited upside

The 3 months correlation between Cisco and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and ProShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares has no effect on the direction of Cisco Systems i.e., Cisco Systems and ProShares go up and down completely randomly.

Pair Corralation between Cisco Systems and ProShares

If you would invest  5,877  in Cisco Systems on December 5, 2024 and sell it today you would earn a total of  432.00  from holding Cisco Systems or generate 7.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cisco Systems  vs.  ProShares

Cisco Systems

Risk-Adjusted Performance

OK

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 weak fundamental indicators, Cisco Systems may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ProShares

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, ProShares is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cisco Systems and ProShares

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

The idea behind Cisco Systems and ProShares 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.