Correlation Between Zebra Technologies and Telefonaktiebolaget
Can any of the company-specific risk be diversified away by investing in both Zebra Technologies and Telefonaktiebolaget 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 Zebra Technologies and Telefonaktiebolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zebra Technologies and Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on Zebra Technologies and Telefonaktiebolaget 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 Zebra Technologies with a short position of Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zebra Technologies and Telefonaktiebolaget.
Diversification Opportunities for Zebra Technologies and Telefonaktiebolaget
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zebra and Telefonaktiebolaget is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget and Zebra Technologies 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 Zebra Technologies are associated (or correlated) with Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and Telefonaktiebolaget go up and down completely randomly.
Pair Corralation between Zebra Technologies and Telefonaktiebolaget
Given the investment horizon of 90 days Zebra Technologies is expected to generate 1.47 times more return on investment than Telefonaktiebolaget. However, Zebra Technologies is 1.47 times more volatile than Telefonaktiebolaget LM Ericsson. It trades about 0.01 of its potential returns per unit of risk. Telefonaktiebolaget LM Ericsson is currently generating about -0.02 per unit of risk. If you would invest 30,221 in Zebra Technologies on January 19, 2024 and sell it today you would lose (2,683) from holding Zebra Technologies or give up 8.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.91% |
| Values | Daily Returns |
Zebra Technologies vs. Telefonaktiebolaget LM Ericsso
Performance |
| Timeline |
| Zebra Technologies |
| Telefonaktiebolaget |
Zebra Technologies and Telefonaktiebolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zebra Technologies and Telefonaktiebolaget
The main advantage of trading using opposite Zebra Technologies and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zebra Technologies position performs unexpectedly, Telefonaktiebolaget 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 Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.| Zebra Technologies vs. Credo Technology Group | Zebra Technologies vs. Ubiquiti Networks | Zebra Technologies vs. Ciena Corp | Zebra Technologies vs. Clearfield |
| Telefonaktiebolaget vs. Goodbye Kansas Group | Telefonaktiebolaget vs. SaltX Technology Holding | Telefonaktiebolaget vs. Oncopeptides AB |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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