Correlation Between Zebra Technologies and AbbVie
Can any of the company-specific risk be diversified away by investing in both Zebra Technologies and AbbVie 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 AbbVie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zebra Technologies and AbbVie Inc, you can compare the effects of market volatilities on Zebra Technologies and AbbVie 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 AbbVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zebra Technologies and AbbVie.
Diversification Opportunities for Zebra Technologies and AbbVie
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zebra and AbbVie is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie 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 AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and AbbVie go up and down completely randomly.
Pair Corralation between Zebra Technologies and AbbVie
Assuming the 90 days trading horizon Zebra Technologies is expected to generate 0.77 times more return on investment than AbbVie. However, Zebra Technologies is 1.31 times less risky than AbbVie. It trades about -0.06 of its potential returns per unit of risk. AbbVie Inc is currently generating about -0.18 per unit of risk. If you would invest 8,200 in Zebra Technologies on October 24, 2024 and sell it today you would lose (125.00) from holding Zebra Technologies or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Zebra Technologies vs. AbbVie Inc
Performance |
| Timeline |
| Zebra Technologies |
| AbbVie Inc |
Zebra Technologies and AbbVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zebra Technologies and AbbVie
The main advantage of trading using opposite Zebra Technologies and AbbVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zebra Technologies position performs unexpectedly, AbbVie 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 AbbVie will offset losses from the drop in AbbVie's long position.| Zebra Technologies vs. Academy Sports and | Zebra Technologies vs. UnitedHealth Group Incorporated | Zebra Technologies vs. Global X Funds | Zebra Technologies vs. Hospital Mater Dei |
| AbbVie vs. Verizon Communications | AbbVie vs. TAL Education Group | AbbVie vs. Air Products and | AbbVie vs. Take Two Interactive Software |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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