Correlation Between Cisco Systems and Comera Life

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

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

Diversification Opportunities for Cisco Systems and Comera Life

-0.59

Correlation Coefficient

Cisco Systems  Comera Life

Excellent diversification

The 3 months correlation between Cisco and Comera is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Comera Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comera Life Sciences 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 Comera Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comera Life Sciences has no effect on the direction of Cisco Systems i.e., Cisco Systems and Comera Life go up and down completely randomly.

Pair Corralation between Cisco Systems and Comera Life

If you would invest  5,477  in Cisco Systems on September 1, 2024 and sell it today you would earn a total of  444.00  from holding Cisco Systems or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Cisco Systems  vs.  Comera Life Sciences

Cisco Systems

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Cisco Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Comera Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cisco Systems and Comera Life

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

The idea behind Cisco Systems and Comera Life Sciences 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 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.