Correlation Between Cisco Systems and Elio Motors

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

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

Diversification Opportunities for Cisco Systems and Elio Motors

-0.5

Correlation Coefficient

Cisco Systems  Elio Motors

Very good diversification

The 3 months correlation between Cisco and Elio is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Elio Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elio Motors 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 Elio Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elio Motors has no effect on the direction of Cisco Systems i.e., Cisco Systems and Elio Motors go up and down completely randomly.

Pair Corralation between Cisco Systems and Elio Motors

Given the investment horizon of 90 days Cisco Systems is expected to generate 0.13 times more return on investment than Elio Motors. However, Cisco Systems is 7.52 times less risky than Elio Motors. It trades about 0.23 of its potential returns per unit of risk. Elio Motors is currently generating about -0.13 per unit of risk. If you would invest  6,662  in Cisco Systems on September 13, 2025 and sell it today you would earn a total of  1,363  from holding Cisco Systems or generate 20.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cisco Systems  vs.  Elio Motors

Cisco Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Cisco Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Elio Motors

Risk-Adjusted Performance

Weakest

Over the last 90 days Elio Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2026. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cisco Systems and Elio Motors

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

The idea behind Cisco Systems and Elio Motors 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.