Correlation Between Blue Apron and Cisco Systems

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Blue Apron 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 Blue Apron and Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Apron Holdings and Cisco Systems, you can compare the effects of market volatilities on Blue Apron 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 Blue Apron with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Apron and Cisco Systems.

Diversification Opportunities for Blue Apron and Cisco Systems

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Blue Apron and Cisco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Blue Apron 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 Blue Apron Holdings 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 Blue Apron i.e., Blue Apron and Cisco Systems go up and down completely randomly.

Pair Corralation between Blue Apron and Cisco Systems

Given the investment horizon of 90 days Blue Apron Holdings is expected to generate 6.16 times more return on investment than Cisco Systems. However, Blue Apron is 6.16 times more volatile than Cisco Systems. It trades about 0.11 of its potential returns per unit of risk. Cisco Systems is currently generating about -0.02 per unit of risk. If you would invest  410.00  in Blue Apron Holdings on July 1, 2022 and sell it today you would earn a total of  211.00  from holding Blue Apron Holdings or generate 51.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Blue Apron Holdings  vs.  Cisco Systems

 Performance (%) 
       Timeline  
Blue Apron Holdings 
Blue Apron Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Apron Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Blue Apron disclosed solid returns over the last few months and may actually be approaching a breakup point.

Blue Apron Price Channel

Cisco Systems 
Cisco Performance
0 of 100
Over the last 90 days Cisco Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Cisco Systems is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Cisco Price Channel

Blue Apron and Cisco Systems Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blue Apron and Cisco Systems

The main advantage of trading using opposite Blue Apron and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron 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.
Blue Apron vs. Amazon Inc
The idea behind Blue Apron Holdings 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.
Cisco Systems vs. Amazon Inc
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

Other Complementary Tools

Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go