Correlation Between Microbot Medical and Digital Turbine

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

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

Diversification Opportunities for Microbot Medical and Digital Turbine

-0.08

Correlation Coefficient

Microbot Medical  Digital Turbine

Good diversification

The 3 months correlation between Microbot and Digital is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Digital Turbine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Turbine and Microbot 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 Microbot Medical are associated (or correlated) with Digital Turbine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Turbine has no effect on the direction of Microbot Medical i.e., Microbot Medical and Digital Turbine go up and down completely randomly.

Pair Corralation between Microbot Medical and Digital Turbine

Assuming the 90 days trading horizon Microbot Medical is expected to generate 1.81 times more return on investment than Digital Turbine. However, Microbot Medical is 1.81 times more volatile than Digital Turbine. It trades about 0.03 of its potential returns per unit of risk. Digital Turbine is currently generating about -0.03 per unit of risk. If you would invest  191.00  in Microbot Medical on October 24, 2024 and sell it today you would lose (13.00) from holding Microbot Medical or give up 6.81% of portfolio value over 90 days.

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

Microbot Medical  vs.  Digital Turbine

Microbot Medical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 8 (%) 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.

Digital Turbine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Turbine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Microbot Medical and Digital Turbine

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

The idea behind Microbot Medical and Digital Turbine 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.