Correlation Between Zebra Technologies and Jefferies Financial

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

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

Diversification Opportunities for Zebra Technologies and Jefferies Financial

0.95

Correlation Coefficient

Zebra Technologies  Jefferies Financial

Almost no diversification

The 3 months correlation between Zebra and Jefferies is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and Jefferies Financial go up and down completely randomly.

Pair Corralation between Zebra Technologies and Jefferies Financial

Assuming the 90 days trading horizon Zebra Technologies is expected to generate 4.08 times less return on investment than Jefferies Financial. But when comparing it to its historical volatility, Zebra Technologies is 1.93 times less risky than Jefferies Financial. It trades about 0.12 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  36,686  in Jefferies Financial Group on October 8, 2024 and sell it today you would earn a total of  12,020  from holding Jefferies Financial Group or generate 32.76% return on investment over 90 days.

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

Zebra Technologies  vs.  Jefferies Financial Group

Zebra Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zebra Technologies are ranked lower than 15 (%) 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.

Jefferies Financial

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jefferies Financial Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Jefferies Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zebra Technologies and Jefferies Financial

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

The idea behind Zebra Technologies and Jefferies Financial Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.