Correlation Between Microbot Medical and Rai Way

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

By analyzing existing cross correlation between Microbot Medical and Rai Way SpA, you can compare the effects of market volatilities on Microbot Medical and Rai Way 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 Rai Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and Rai Way.

Diversification Opportunities for Microbot Medical and Rai Way

0.23

Correlation Coefficient

Microbot Medical  Rai Way

Modest diversification

The 3 months correlation between Microbot and Rai is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Rai Way SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rai Way SpA 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 Rai Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rai Way SpA has no effect on the direction of Microbot Medical i.e., Microbot Medical and Rai Way go up and down completely randomly.

Pair Corralation between Microbot Medical and Rai Way

Assuming the 90 days trading horizon Microbot Medical is expected to generate 12.82 times more return on investment than Rai Way. However, Microbot Medical is 12.82 times more volatile than Rai Way SpA. It trades about 0.08 of its potential returns per unit of risk. Rai Way SpA is currently generating about 0.07 per unit of risk. If you would invest  108.00  in Microbot Medical on December 29, 2024 and sell it today you would earn a total of  31.00  from holding Microbot Medical or generate 28.7% return on investment over 90 days.

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

Microbot Medical  vs.  Rai Way SpA

Microbot Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Rai Way SpA

Risk-Adjusted Performance

Modest

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

Pair Trading with Microbot Medical and Rai Way

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

The idea behind Microbot Medical and Rai Way SpA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.