Correlation Between Event Hospitality and Microbot Medical

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

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

Diversification Opportunities for Event Hospitality and Microbot Medical

-0.02

Correlation Coefficient

Event Hospitality  Microbot Medical

Good diversification

The 3 months correlation between Event and Microbot is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Event Hospitality and and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Event Hospitality 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 Event Hospitality and 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 Event Hospitality i.e., Event Hospitality and Microbot Medical go up and down completely randomly.

Pair Corralation between Event Hospitality and Microbot Medical

Assuming the 90 days trading horizon Event Hospitality is expected to generate 1.63 times less return on investment than Microbot Medical. But when comparing it to its historical volatility, Event Hospitality and is 4.0 times less risky than Microbot Medical. It trades about 0.02 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  187.00  in Microbot Medical on October 4, 2024 and sell it today you would lose (78.00) from holding Microbot Medical or give up 41.71% of portfolio value over 90 days.

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

Event Hospitality and  vs.  Microbot Medical

Event Hospitality

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Event Hospitality and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Event Hospitality may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Microbot Medical

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Event Hospitality and Microbot Medical

The main advantage of trading using opposite Event Hospitality and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Event Hospitality 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 Event Hospitality and 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.