Correlation Between Cisco Systems and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and ProShares Short 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 ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and ProShares Short Russell2000, you can compare the effects of market volatilities on Cisco Systems and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and ProShares Short.
Diversification Opportunities for Cisco Systems and ProShares Short
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and ProShares is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and ProShares Short Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Russ 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Russ has no effect on the direction of Cisco Systems i.e., Cisco Systems and ProShares Short go up and down completely randomly.
Pair Corralation between Cisco Systems and ProShares Short
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.89 times more return on investment than ProShares Short. However, Cisco Systems is 1.12 times less risky than ProShares Short. It trades about 0.1 of its potential returns per unit of risk. ProShares Short Russell2000 is currently generating about 0.02 per unit of risk. If you would invest 6,392 in Cisco Systems on March 20, 2025 and sell it today you would earn a total of 141.00 from holding Cisco Systems or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. ProShares Short Russell2000
Performance |
| Timeline |
| Cisco Systems |
| ProShares Short Russ |
Cisco Systems and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and ProShares Short
The main advantage of trading using opposite Cisco Systems and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short's long position.| Cisco Systems vs. ADTRAN Inc | Cisco Systems vs. KVH Industries | Cisco Systems vs. Telesat Corp | Cisco Systems vs. Digi International |
| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short Dow30 | ProShares Short vs. ProShares Short MidCap400 | ProShares Short vs. ProShares UltraShort Russell2000 |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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