Correlation Between Integrated Media and Motorola Solutions

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

By analyzing existing cross correlation between Integrated Media Technology and Motorola Solutions, you can compare the effects of market volatilities on Integrated Media and Motorola Solutions 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 Integrated Media with a short position of Motorola Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Media and Motorola Solutions.

Diversification Opportunities for Integrated Media and Motorola Solutions

-0.34

Correlation Coefficient

Integrated Media  Motorola Solutions

Very good diversification

The 3 months correlation between Integrated and Motorola is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Media Technology and Motorola Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorola Solutions and Integrated Media 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 Integrated Media Technology are associated (or correlated) with Motorola Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorola Solutions has no effect on the direction of Integrated Media i.e., Integrated Media and Motorola Solutions go up and down completely randomly.

Pair Corralation between Integrated Media and Motorola Solutions

Given the investment horizon of 90 days Integrated Media Technology is expected to under-perform the Motorola Solutions. In addition to that, Integrated Media is 5.05 times more volatile than Motorola Solutions. It trades about -0.01 of its total potential returns per unit of risk. Motorola Solutions is currently generating about 0.17 per unit of volatility. If you would invest  43,939  in Motorola Solutions on September 1, 2024 and sell it today you would earn a total of  6,031  from holding Motorola Solutions or generate 13.73% return on investment over 90 days.

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

Integrated Media Technology  vs.  Motorola Solutions

Integrated Media Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Integrated Media is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Motorola Solutions

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Motorola Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Motorola Solutions demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integrated Media and Motorola Solutions

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

The idea behind Integrated Media Technology and Motorola Solutions 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.