Correlation Between Comtech Telecommunicatio and Zebra Technologies

Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Zebra Technologies 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 Comtech Telecommunicatio and Zebra Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comtech Telecommunications Corp and Zebra Technologies, you can compare the effects of market volatilities on Comtech Telecommunicatio and Zebra Technologies 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 Comtech Telecommunicatio with a short position of Zebra Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Zebra Technologies.

Diversification Opportunities for Comtech Telecommunicatio and Zebra Technologies

0.61

Correlation Coefficient

Comtech Telecommunicatio  Zebra Technologies

Poor diversification

The 3 months correlation between Comtech and Zebra is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Zebra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zebra Technologies and Comtech Telecommunicatio 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 Comtech Telecommunications Corp are associated (or correlated) with Zebra Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zebra Technologies has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Zebra Technologies go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and Zebra Technologies

Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Zebra Technologies. In addition to that, Comtech Telecommunicatio is 4.06 times more volatile than Zebra Technologies. It trades about -0.12 of its total potential returns per unit of risk. Zebra Technologies is currently generating about -0.23 per unit of volatility. If you would invest  38,385  in Zebra Technologies on December 28, 2024 and sell it today you would lose (10,542) from holding Zebra Technologies or give up 27.46% of portfolio value over 90 days.

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

Comtech Telecommunications Cor  vs.  Zebra Technologies

Comtech Telecommunicatio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comtech Telecommunications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Zebra Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zebra Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Comtech Telecommunicatio and Zebra Technologies

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

The idea behind Comtech Telecommunications Corp and Zebra Technologies 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.