Correlation Between Science Strategic and Cisco Systems

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

Diversification Opportunities for Science Strategic and Cisco Systems

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Science and Cisco is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Science Strategic Acquisition and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Science Strategic 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 Science Strategic Acquisition 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 Science Strategic i.e., Science Strategic and Cisco Systems go up and down completely randomly.

Pair Corralation between Science Strategic and Cisco Systems

Given the investment horizon of 90 days Science Strategic is expected to generate 17.01 times less return on investment than Cisco Systems. But when comparing it to its historical volatility, Science Strategic Acquisition is 5.82 times less risky than Cisco Systems. It trades about 0.11 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  4,260  in Cisco Systems on May 17, 2022 and sell it today you would earn a total of  399.00  from holding Cisco Systems or generate 9.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Science Strategic Acquisition  vs.  Cisco Systems

 Performance (%) 
       Timeline  
Science Strategic 
Science Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Science Strategic Acquisition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Science Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Science 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 current stock price mess, may contribute to short-term losses for the institutional investors.

Cisco Price Channel

Science Strategic and Cisco Systems Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Science Strategic and Cisco Systems

The main advantage of trading using opposite Science Strategic and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Strategic 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.

Science Strategic Acquisition

Pair trading matchups for Science Strategic

Aspen Technology vs. Science Strategic
Visa vs. Science Strategic
Equinix vs. Science Strategic
Graphic Packaging vs. Science Strategic
Dupont Denemours vs. Science Strategic
Amazon vs. Science Strategic
Tenneco Automotive vs. Science Strategic
Oracle vs. Science Strategic
Ford vs. Science Strategic
Sentinelone Inc vs. Science Strategic
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Science Strategic as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Science Strategic's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Science Strategic's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Science Strategic Acquisition.
The idea behind Science Strategic Acquisition 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

Pair trading matchups for Cisco Systems

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go