Correlation Between Cisco Systems and Matthews China
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Matthews China 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 Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Matthews China Discovery, you can compare the effects of market volatilities on Cisco Systems and Matthews China 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 Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Matthews China.
Diversification Opportunities for Cisco Systems and Matthews China
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cisco and Matthews is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Matthews China Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Discovery 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 Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China Discovery has no effect on the direction of Cisco Systems i.e., Cisco Systems and Matthews China go up and down completely randomly.
Pair Corralation between Cisco Systems and Matthews China
Given the investment horizon of 90 days Cisco Systems is expected to generate 2.42 times less return on investment than Matthews China. In addition to that, Cisco Systems is 1.09 times more volatile than Matthews China Discovery. It trades about 0.1 of its total potential returns per unit of risk. Matthews China Discovery is currently generating about 0.28 per unit of volatility. If you would invest 2,777 in Matthews China Discovery on June 3, 2025 and sell it today you would earn a total of 592.00 from holding Matthews China Discovery or generate 21.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Matthews China Discovery
Performance |
| Timeline |
| Cisco Systems |
| Matthews China Discovery |
Cisco Systems and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Matthews China
The main advantage of trading using opposite Cisco Systems and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Matthews China 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 Matthews China will offset losses from the drop in Matthews China's long position.| Cisco Systems vs. Ciena Corp | Cisco Systems vs. Hewlett Packard Enterprise | Cisco Systems vs. International Business Machines | Cisco Systems vs. Intel |
| Matthews China vs. FT Vest Equity | Matthews China vs. Northern Lights | Matthews China vs. Dimensional International High | Matthews China vs. JPMorgan Fundamental Data |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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