Correlation Between Cisco Systems and SVELEV

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

By analyzing existing cross correlation between Cisco Systems and SVELEV 18 10 FEB 31, you can compare the effects of market volatilities on Cisco Systems and SVELEV 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 SVELEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and SVELEV.

Diversification Opportunities for Cisco Systems and SVELEV

-0.58

Correlation Coefficient

Cisco Systems  SVELEV

Excellent diversification

The 3 months correlation between Cisco and SVELEV is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and SVELEV 18 10 FEB 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVELEV 18 10 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 SVELEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVELEV 18 10 has no effect on the direction of Cisco Systems i.e., Cisco Systems and SVELEV go up and down completely randomly.

Pair Corralation between Cisco Systems and SVELEV

Given the investment horizon of 90 days Cisco Systems is expected to generate 3.02 times more return on investment than SVELEV. However, Cisco Systems is 3.02 times more volatile than SVELEV 18 10 FEB 31. It trades about 0.12 of its potential returns per unit of risk. SVELEV 18 10 FEB 31 is currently generating about -0.02 per unit of risk. If you would invest  5,870  in Cisco Systems on November 3, 2024 and sell it today you would earn a total of  190.00  from holding Cisco Systems or generate 3.24% 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.  SVELEV 18 10 FEB 31

Cisco Systems

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 11 (%) 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 March 2025.

SVELEV 18 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVELEV 18 10 FEB 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SVELEV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cisco Systems and SVELEV

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

The idea behind Cisco Systems and SVELEV 18 10 FEB 31 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.