Correlation Between Motorola Solutions and Padtec Holding

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

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

Diversification Opportunities for Motorola Solutions and Padtec Holding

0.17

Correlation Coefficient

Motorola Solutions  Padtec Holding

Average diversification

The 3 months correlation between Motorola and Padtec is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Motorola Solutions and Padtec Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Padtec Holding SA and Motorola Solutions 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 Motorola Solutions are associated (or correlated) with Padtec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Padtec Holding SA has no effect on the direction of Motorola Solutions i.e., Motorola Solutions and Padtec Holding go up and down completely randomly.

Pair Corralation between Motorola Solutions and Padtec Holding

Assuming the 90 days trading horizon Motorola Solutions is expected to under-perform the Padtec Holding. But the stock apears to be less risky and, when comparing its historical volatility, Motorola Solutions is 1.76 times less risky than Padtec Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Padtec Holding SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Padtec Holding SA on April 24, 2025 and sell it today you would lose (2.00) from holding Padtec Holding SA or give up 1.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Motorola Solutions  vs.  Padtec Holding SA

Motorola Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Motorola Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Motorola Solutions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Padtec Holding SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Padtec Holding SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Padtec Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Motorola Solutions and Padtec Holding

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

The idea behind Motorola Solutions and Padtec Holding SA 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.