Correlation Between Cisco Systems and Zai Lab
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Zai Lab 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 Zai Lab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Zai Lab, you can compare the effects of market volatilities on Cisco Systems and Zai Lab 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 Zai Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Zai Lab.
Diversification Opportunities for Cisco Systems and Zai Lab
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and Zai is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Zai Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zai Lab 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 Zai Lab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zai Lab has no effect on the direction of Cisco Systems i.e., Cisco Systems and Zai Lab go up and down completely randomly.
Pair Corralation between Cisco Systems and Zai Lab
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.34 times more return on investment than Zai Lab. However, Cisco Systems is 2.93 times less risky than Zai Lab. It trades about 0.09 of its potential returns per unit of risk. Zai Lab is currently generating about 0.01 per unit of risk. If you would invest 4,602 in Cisco Systems on September 21, 2025 and sell it today you would earn a total of 3,240 from holding Cisco Systems or generate 70.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Cisco Systems vs. Zai Lab
Performance |
| Timeline |
| Cisco Systems |
| Zai Lab |
Cisco Systems and Zai Lab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Zai Lab
The main advantage of trading using opposite Cisco Systems and Zai Lab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Zai Lab 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 Zai Lab will offset losses from the drop in Zai Lab's long position.| Cisco Systems vs. International Business Machines | Cisco Systems vs. SAP SE ADR | Cisco Systems vs. Micron Technology | Cisco Systems vs. Salesforce |
| Zai Lab vs. Legend Biotech Corp | Zai Lab vs. Disc Medicine | Zai Lab vs. Ascentage Pharma Group | Zai Lab vs. Scholar Rock Holding |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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