Correlation Between Cisco Systems and SunPower
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and SunPower 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 SunPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and SunPower, you can compare the effects of market volatilities on Cisco Systems and SunPower 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 SunPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and SunPower.
Diversification Opportunities for Cisco Systems and SunPower
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and SunPower is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and SunPower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunPower 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 SunPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunPower has no effect on the direction of Cisco Systems i.e., Cisco Systems and SunPower go up and down completely randomly.
Pair Corralation between Cisco Systems and SunPower
If you would invest 5,550 in Cisco Systems on September 2, 2024 and sell it today you would earn a total of 371.00 from holding Cisco Systems or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cisco Systems vs. SunPower
Performance |
| Timeline |
| Cisco Systems |
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cisco Systems and SunPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and SunPower
The main advantage of trading using opposite Cisco Systems and SunPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, SunPower 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 SunPower will offset losses from the drop in SunPower's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower vs. SolarEdge Technologies |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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