Correlation Between Zebra Technologies and EMCORE

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

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

Diversification Opportunities for Zebra Technologies and EMCORE

-0.66

Correlation Coefficient

Zebra Technologies  EMCORE

Excellent diversification

The 3 months correlation between Zebra and EMCORE is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE 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 EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and EMCORE go up and down completely randomly.

Pair Corralation between Zebra Technologies and EMCORE

Given the investment horizon of 90 days Zebra Technologies is expected to under-perform the EMCORE. In addition to that, Zebra Technologies is 3.06 times more volatile than EMCORE. It trades about -0.2 of its total potential returns per unit of risk. EMCORE is currently generating about 0.14 per unit of volatility. If you would invest  294.00  in EMCORE on December 2, 2024 and sell it today you would earn a total of  16.00  from holding EMCORE or generate 5.44% return on investment over 90 days.

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

Zebra Technologies  vs.  EMCORE

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.

EMCORE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMCORE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking signals, EMCORE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Zebra Technologies and EMCORE

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

The idea behind Zebra Technologies and EMCORE 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.