Correlation Between Intelbras and Motorola Solutions

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

By analyzing existing cross correlation between Intelbras SA and Motorola Solutions, you can compare the effects of market volatilities on Intelbras and Motorola Solutions 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 Intelbras with a short position of Motorola Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelbras and Motorola Solutions.

Diversification Opportunities for Intelbras and Motorola Solutions

-0.08

Correlation Coefficient

Intelbras  Motorola Solutions

Good diversification

The 3 months correlation between Intelbras and Motorola is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intelbras SA and Motorola Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorola Solutions and Intelbras 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 Intelbras SA are associated (or correlated) with Motorola Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorola Solutions has no effect on the direction of Intelbras i.e., Intelbras and Motorola Solutions go up and down completely randomly.

Pair Corralation between Intelbras and Motorola Solutions

Assuming the 90 days trading horizon Intelbras SA is expected to under-perform the Motorola Solutions. In addition to that, Intelbras is 1.42 times more volatile than Motorola Solutions. It trades about -0.17 of its total potential returns per unit of risk. Motorola Solutions is currently generating about -0.18 per unit of volatility. If you would invest  68,858  in Motorola Solutions on December 2, 2024 and sell it today you would lose (5,169) from holding Motorola Solutions or give up 7.51% of portfolio value over 90 days.

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

Intelbras SA   vs.  Motorola Solutions

Intelbras SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intelbras SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Motorola Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Motorola Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Intelbras and Motorola Solutions

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

The idea behind Intelbras SA and Motorola Solutions 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.