Correlation Between Texas Instruments and Embark Small

Can any of the company-specific risk be diversified away by investing in both Texas Instruments and Embark Small 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 Texas Instruments and Embark Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Texas Instruments Incorporated and Embark Small Cap, you can compare the effects of market volatilities on Texas Instruments and Embark Small 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 Texas Instruments with a short position of Embark Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Instruments and Embark Small.

Diversification Opportunities for Texas Instruments and Embark Small

0.8

Correlation Coefficient

Texas Instruments  Embark Small

Very poor diversification

The 3 months correlation between Texas and Embark is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Texas Instruments Incorporated and Embark Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Small Cap and Texas Instruments 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 Texas Instruments Incorporated are associated (or correlated) with Embark Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Small Cap has no effect on the direction of Texas Instruments i.e., Texas Instruments and Embark Small go up and down completely randomly.

Pair Corralation between Texas Instruments and Embark Small

Considering the 90-day investment horizon Texas Instruments Incorporated is expected to generate 2.19 times more return on investment than Embark Small. However, Texas Instruments is 2.19 times more volatile than Embark Small Cap. It trades about 0.1 of its potential returns per unit of risk. Embark Small Cap is currently generating about 0.15 per unit of risk. If you would invest  15,993  in Texas Instruments Incorporated on May 6, 2025 and sell it today you would earn a total of  2,280  from holding Texas Instruments Incorporated or generate 14.26% return on investment over 90 days.

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

Texas Instruments Incorporated  vs.  Embark Small Cap

Texas Instruments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Instruments Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Texas Instruments displayed solid returns over the last few months and may actually be approaching a breakup point.

Embark Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Embark Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Embark Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Texas Instruments and Embark Small

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

The idea behind Texas Instruments Incorporated and Embark Small Cap 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.