Correlation Between Monolithic Power and Zebra Technologies

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

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

Diversification Opportunities for Monolithic Power and Zebra Technologies

0.88

Correlation Coefficient

Monolithic Power  Zebra Technologies

Very poor diversification

The 3 months correlation between Monolithic and Zebra is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Zebra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zebra Technologies and Monolithic Power 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 Monolithic Power Systems are associated (or correlated) with Zebra Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zebra Technologies has no effect on the direction of Monolithic Power i.e., Monolithic Power and Zebra Technologies go up and down completely randomly.

Pair Corralation between Monolithic Power and Zebra Technologies

Given the investment horizon of 90 days Monolithic Power is expected to generate 1.26 times less return on investment than Zebra Technologies. In addition to that, Monolithic Power is 1.29 times more volatile than Zebra Technologies. It trades about 0.14 of its total potential returns per unit of risk. Zebra Technologies is currently generating about 0.24 per unit of volatility. If you would invest  25,070  in Zebra Technologies on May 3, 2025 and sell it today you would earn a total of  8,832  from holding Zebra Technologies or generate 35.23% return on investment over 90 days.

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

Monolithic Power Systems  vs.  Zebra Technologies

Monolithic Power Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monolithic Power Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Monolithic Power reported solid returns over the last few months and may actually be approaching a breakup point.

Zebra Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zebra Technologies are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Zebra Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monolithic Power and Zebra Technologies

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

The idea behind Monolithic Power Systems and Zebra Technologies 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.