Correlation Between ENVVENO MEDICAL and Microbot Medical

Can any of the company-specific risk be diversified away by investing in both ENVVENO MEDICAL and Microbot Medical 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 ENVVENO MEDICAL and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ENVVENO MEDICAL DL 00001 and Microbot Medical, you can compare the effects of market volatilities on ENVVENO MEDICAL and Microbot Medical 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 ENVVENO MEDICAL with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENVVENO MEDICAL and Microbot Medical.

Diversification Opportunities for ENVVENO MEDICAL and Microbot Medical

0.46

Correlation Coefficient

ENVVENO MEDICAL  Microbot Medical

Very weak diversification

The 3 months correlation between ENVVENO and Microbot is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ENVVENO MEDICAL DL 00001 and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and ENVVENO MEDICAL 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 ENVVENO MEDICAL DL 00001 are associated (or correlated) with Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of ENVVENO MEDICAL i.e., ENVVENO MEDICAL and Microbot Medical go up and down completely randomly.

Pair Corralation between ENVVENO MEDICAL and Microbot Medical

Assuming the 90 days horizon ENVVENO MEDICAL DL 00001 is expected to under-perform the Microbot Medical. But the stock apears to be less risky and, when comparing its historical volatility, ENVVENO MEDICAL DL 00001 is 6.57 times less risky than Microbot Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Microbot Medical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Microbot Medical on December 25, 2024 and sell it today you would earn a total of  56.00  from holding Microbot Medical or generate 56.0% return on investment over 90 days.

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

ENVVENO MEDICAL DL 00001  vs.  Microbot Medical

ENVVENO MEDICAL DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days ENVVENO MEDICAL DL 00001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Microbot Medical

Risk-Adjusted Performance

OK

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

Pair Trading with ENVVENO MEDICAL and Microbot Medical

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

The idea behind ENVVENO MEDICAL DL 00001 and Microbot Medical 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.