Correlation Between Wallbox NV and Cisco Systems

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

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

Diversification Opportunities for Wallbox NV and Cisco Systems

-0.18

Correlation Coefficient

Wallbox NV  Cisco Systems

Good diversification

The 3 months correlation between Wallbox and Cisco is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wallbox NV and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Wallbox NV 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 Wallbox NV 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 Wallbox NV i.e., Wallbox NV and Cisco Systems go up and down completely randomly.

Pair Corralation between Wallbox NV and Cisco Systems

Considering the 90-day investment horizon Wallbox NV is expected to under-perform the Cisco Systems. In addition to that, Wallbox NV is 6.05 times more volatile than Cisco Systems. It trades about -0.04 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.05 per unit of volatility. If you would invest  5,879  in Cisco Systems on December 28, 2024 and sell it today you would earn a total of  207.00  from holding Cisco Systems or generate 3.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Wallbox NV  vs.  Cisco Systems

Wallbox NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wallbox NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cisco Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Cisco Systems is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Wallbox NV and Cisco Systems

The main advantage of trading using opposite Wallbox NV and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallbox NV 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 Wallbox NV 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.