Correlation Between Motorola Solutions and Neonode
Can any of the company-specific risk be diversified away by investing in both Motorola Solutions and Neonode 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 Neonode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motorola Solutions and Neonode, you can compare the effects of market volatilities on Motorola Solutions and Neonode 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 Neonode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motorola Solutions and Neonode.
Diversification Opportunities for Motorola Solutions and Neonode
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Motorola and Neonode is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Motorola Solutions and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode 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 Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of Motorola Solutions i.e., Motorola Solutions and Neonode go up and down completely randomly.
Pair Corralation between Motorola Solutions and Neonode
Considering the 90-day investment horizon Motorola Solutions is expected to under-perform the Neonode. But the stock apears to be less risky and, when comparing its historical volatility, Motorola Solutions is 5.69 times less risky than Neonode. The stock trades about -0.18 of its potential returns per unit of risk. The Neonode is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 670.00 in Neonode on September 12, 2024 and sell it today you would earn a total of 111.00 from holding Neonode or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Motorola Solutions vs. Neonode
Performance |
| Timeline |
| Motorola Solutions |
| Neonode |
Motorola Solutions and Neonode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motorola Solutions and Neonode
The main advantage of trading using opposite Motorola Solutions and Neonode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motorola Solutions position performs unexpectedly, Neonode 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 Neonode will offset losses from the drop in Neonode's long position.| Motorola Solutions vs. Hewlett Packard Enterprise | Motorola Solutions vs. Juniper Networks | Motorola Solutions vs. Ciena Corp | Motorola Solutions vs. Cisco Systems |
| Neonode vs. LightPath Technologies | Neonode vs. Methode Electronics | Neonode vs. OSI Systems | Neonode vs. Plexus Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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