Correlation Between Zebra Technologies and MKS Instruments

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

By analyzing existing cross correlation between Zebra Technologies and MKS Instruments, you can compare the effects of market volatilities on Zebra Technologies and MKS Instruments 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 MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zebra Technologies and MKS Instruments.

Diversification Opportunities for Zebra Technologies and MKS Instruments

0.92

Correlation Coefficient

Zebra Technologies  MKS Instruments

Almost no diversification

The 3 months correlation between Zebra and MKS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments 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 MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and MKS Instruments go up and down completely randomly.

Pair Corralation between Zebra Technologies and MKS Instruments

Given the investment horizon of 90 days Zebra Technologies is expected to generate 0.74 times more return on investment than MKS Instruments. However, Zebra Technologies is 1.35 times less risky than MKS Instruments. It trades about 0.22 of its potential returns per unit of risk. MKS Instruments is currently generating about 0.15 per unit of risk. If you would invest  25,085  in Zebra Technologies on May 6, 2025 and sell it today you would earn a total of  8,439  from holding Zebra Technologies or generate 33.64% return on investment over 90 days.

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

Zebra Technologies  vs.  MKS Instruments

Zebra Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zebra Technologies are ranked lower than 17 (%) 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.

MKS Instruments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MKS Instruments are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, MKS Instruments demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zebra Technologies and MKS Instruments

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

The idea behind Zebra Technologies and MKS Instruments 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.