Correlation Between Zebra Technologies and Fiserv

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

By analyzing existing cross correlation between Zebra Technologies and Fiserv Inc, you can compare the effects of market volatilities on Zebra Technologies and Fiserv 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 Fiserv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zebra Technologies and Fiserv.

Diversification Opportunities for Zebra Technologies and Fiserv

0.84

Correlation Coefficient

Zebra Technologies  Fiserv

Very poor diversification

The 3 months correlation between Zebra and Fiserv is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and Fiserv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiserv Inc 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 Fiserv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiserv Inc has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and Fiserv go up and down completely randomly.

Pair Corralation between Zebra Technologies and Fiserv

Assuming the 90 days trading horizon Zebra Technologies is expected to generate 1.7 times more return on investment than Fiserv. However, Zebra Technologies is 1.7 times more volatile than Fiserv Inc. It trades about 0.14 of its potential returns per unit of risk. Fiserv Inc is currently generating about 0.2 per unit of risk. If you would invest  4,112  in Zebra Technologies on October 24, 2024 and sell it today you would earn a total of  3,963  from holding Zebra Technologies or generate 96.38% return on investment over 90 days.

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

Zebra Technologies  vs.  Fiserv Inc

Zebra Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zebra Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Zebra Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Fiserv Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Fiserv may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Zebra Technologies and Fiserv

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

The idea behind Zebra Technologies and Fiserv Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..