Correlation Between Cisco Systems and Catalyst Insider

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

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

Diversification Opportunities for Cisco Systems and Catalyst Insider

0.62

Correlation Coefficient

Cisco Systems  Catalyst Insider

Poor diversification

The 3 months correlation between Cisco and Catalyst is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Catalyst Insider Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Insider Income 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 Catalyst Insider. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Insider Income has no effect on the direction of Cisco Systems i.e., Cisco Systems and Catalyst Insider go up and down completely randomly.

Pair Corralation between Cisco Systems and Catalyst Insider

Given the investment horizon of 90 days Cisco Systems is expected to generate 15.38 times more return on investment than Catalyst Insider. However, Cisco Systems is 15.38 times more volatile than Catalyst Insider Income. It trades about 0.12 of its potential returns per unit of risk. Catalyst Insider Income is currently generating about 0.21 per unit of risk. If you would invest  6,901  in Cisco Systems on August 28, 2025 and sell it today you would earn a total of  703.00  from holding Cisco Systems or generate 10.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cisco Systems  vs.  Catalyst Insider Income

Cisco Systems

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Cisco Systems may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Catalyst Insider Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Insider Income are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalyst Insider is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cisco Systems and Catalyst Insider

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

The idea behind Cisco Systems and Catalyst Insider Income 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.