Correlation Between Microbot Medical and Genertec Universal

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

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

Diversification Opportunities for Microbot Medical and Genertec Universal

0.4

Correlation Coefficient

Microbot Medical  Genertec Universal

Very weak diversification

The 3 months correlation between Microbot and Genertec is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Genertec Universal Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genertec Universal 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 Genertec Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genertec Universal has no effect on the direction of Microbot Medical i.e., Microbot Medical and Genertec Universal go up and down completely randomly.

Pair Corralation between Microbot Medical and Genertec Universal

Assuming the 90 days trading horizon Microbot Medical is expected to generate 0.94 times more return on investment than Genertec Universal. However, Microbot Medical is 1.07 times less risky than Genertec Universal. It trades about 0.12 of its potential returns per unit of risk. Genertec Universal Medical is currently generating about 0.04 per unit of risk. If you would invest  90.00  in Microbot Medical on October 8, 2024 and sell it today you would earn a total of  19.00  from holding Microbot Medical or generate 21.11% return on investment over 90 days.

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

Microbot Medical  vs.  Genertec Universal Medical

Microbot Medical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 9 (%) 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.

Genertec Universal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genertec Universal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Microbot Medical and Genertec Universal

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

The idea behind Microbot Medical and Genertec Universal 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.