Correlation Between Microbot Medical and AIR LIQUIDE

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

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

Diversification Opportunities for Microbot Medical and AIR LIQUIDE

-0.5

Correlation Coefficient

Microbot Medical  AIR LIQUIDE

Very good diversification

The 3 months correlation between Microbot and AIR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and AIR LIQUIDE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR LIQUIDE ADR 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 AIR LIQUIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR LIQUIDE ADR has no effect on the direction of Microbot Medical i.e., Microbot Medical and AIR LIQUIDE go up and down completely randomly.

Pair Corralation between Microbot Medical and AIR LIQUIDE

Assuming the 90 days trading horizon Microbot Medical is expected to generate 3.98 times more return on investment than AIR LIQUIDE. However, Microbot Medical is 3.98 times more volatile than AIR LIQUIDE ADR. It trades about 0.21 of its potential returns per unit of risk. AIR LIQUIDE ADR is currently generating about -0.17 per unit of risk. If you would invest  85.00  in Microbot Medical on October 6, 2024 and sell it today you would earn a total of  24.00  from holding Microbot Medical or generate 28.24% return on investment over 90 days.

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

Microbot Medical  vs.  AIR LIQUIDE ADR

Microbot Medical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 12 (%) 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.

AIR LIQUIDE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Microbot Medical and AIR LIQUIDE

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

The idea behind Microbot Medical and AIR LIQUIDE ADR 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.