Correlation Between Motorola Solutions and AstroNova
Can any of the company-specific risk be diversified away by investing in both Motorola Solutions and AstroNova 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 Motorola Solutions and AstroNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motorola Solutions and AstroNova, you can compare the effects of market volatilities on Motorola Solutions and AstroNova 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 Motorola Solutions with a short position of AstroNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motorola Solutions and AstroNova.
Diversification Opportunities for Motorola Solutions and AstroNova
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Motorola and AstroNova is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Motorola Solutions and AstroNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstroNova and Motorola Solutions 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 Motorola Solutions are associated (or correlated) with AstroNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstroNova has no effect on the direction of Motorola Solutions i.e., Motorola Solutions and AstroNova go up and down completely randomly.
Pair Corralation between Motorola Solutions and AstroNova
Considering the 90-day investment horizon Motorola Solutions is expected to generate 0.46 times more return on investment than AstroNova. However, Motorola Solutions is 2.18 times less risky than AstroNova. It trades about 0.06 of its potential returns per unit of risk. AstroNova is currently generating about -0.02 per unit of risk. If you would invest 45,284 in Motorola Solutions on November 1, 2024 and sell it today you would earn a total of 1,977 from holding Motorola Solutions or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motorola Solutions vs. AstroNova
Performance |
| Timeline |
| Motorola Solutions |
| AstroNova |
Motorola Solutions and AstroNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motorola Solutions and AstroNova
The main advantage of trading using opposite Motorola Solutions and AstroNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motorola Solutions position performs unexpectedly, AstroNova 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 AstroNova will offset losses from the drop in AstroNova's long position.| Motorola Solutions vs. Ciena Corp | Motorola Solutions vs. Extreme Networks | Motorola Solutions vs. Hewlett Packard Enterprise | Motorola Solutions vs. NETGEAR |
| AstroNova vs. Key Tronic | AstroNova vs. Identiv | AstroNova vs. Red Cat Holdings | AstroNova vs. TransAct Technologies Incorporated |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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