Correlation Between Intel and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Intel and Cisco Systems 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 Intel and Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Cisco Systems, you can compare the effects of market volatilities on Intel and Cisco Systems 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 Intel with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Cisco Systems.
Diversification Opportunities for Intel and Cisco Systems
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intel and Cisco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Intel 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 Intel are associated (or correlated) with Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Intel i.e., Intel and Cisco Systems go up and down completely randomly.
Pair Corralation between Intel and Cisco Systems
Given the investment horizon of 90 days Intel is expected to generate 2.56 times more return on investment than Cisco Systems. However, Intel is 2.56 times more volatile than Cisco Systems. It trades about 0.12 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.08 per unit of risk. If you would invest 2,055 in Intel on May 22, 2025 and sell it today you would earn a total of 476.00 from holding Intel or generate 23.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Cisco Systems
Performance |
| Timeline |
| Intel |
| Cisco Systems |
Intel and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Cisco Systems
The main advantage of trading using opposite Intel and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Intel vs. NVIDIA | Intel vs. Marvell Technology Group | Intel vs. Advanced Micro Devices | Intel vs. Broadcom |
| Cisco Systems vs. Ciena Corp | Cisco Systems vs. Hewlett Packard Enterprise | Cisco Systems vs. International Business Machines | Cisco Systems vs. Intel |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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