By analyzing existing forward indicators between Viavi Solutions and Cisco, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Cisco with a short position in Viavi Solutions. Check out our
pair correlation module for more information.
Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Viavi Solutions has an asset utilization ratio of 69.13 percent. This indicates that the company is making $0.69 for each dollar of assets. An increasing asset utilization means that Viavi Solutions is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Viavi or Knowles is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is Viavi Solutions's Liquidity
Viavi Solutions
financial leverage refers to using borrowed capital as a funding source to finance Viavi Solutions ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Viavi Solutions financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Viavi Solutions' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Viavi Solutions' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Viavi Solutions's total debt and its cash.
Correlation Between Viavi and Knowles Cor
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Viavi Solutions together with similar or unrelated positions with a negative correlation. For example, you can also add Knowles Cor to your portfolio. If Knowles Cor is not perfectly correlated to Viavi Solutions it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Viavi Solutions, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Viavi Solutions and Knowles Cor in your portfolio? Please note if you are using this as a pair-trade strategy between Viavi Solutions and Knowles Cor, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between VIAV and KN for more information.
Breaking down Viavi Solutions Indicators
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Lets now check Viavi Solutions revenue. Based on the latest financial disclosure, Viavi Solutions reported 1.16
B of revenue. This is 71.54% lower than that of the Technology sector and 76.31% lower than that of the
Communication Equipment industry. The revenue for all United States stocks is 87.71% higher than that of the firm. As for Cisco Systems we see revenue of 50.57
B, which is much higher than that of the Communication Equipment
| VIAV | 1.16 Billion | 2.08 |
| Sector | 4.08 Billion | 7.3 |
| CSCO | 50.57 Billion | 90.62 |
Viavi Solutions is projected to stay under $14.5 in September
Semi deviation is down to 2.47. It may cause a possible volatility fall. Viavi Solutions currently demonstrates below-verage downside deviation. It has Information Ratio of 0.03 and Jensen Alpha of 0.1. However, we do advice investors to further question Viavi Solutions expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.
Our Conclusion on Viavi Solutions
While other companies in the communication equipment industry are either recovering or due for a correction, Viavi may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 11th of August 2020, our analysis shows that Viavi Solutions follows the market closely. The venture is
fairly valued and projects
high odds of distress for the next 2 years. Our up-to-date 30 days buy-hold-sell advice on the venture is
Strong Buy.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Viavi Solutions. Please refer to our
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