Correlation Between Microbot Medical and ArcelorMittal

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

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

Diversification Opportunities for Microbot Medical and ArcelorMittal

-0.38

Correlation Coefficient

Microbot Medical  ArcelorMittal

Very good diversification

The 3 months correlation between Microbot and ArcelorMittal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of Microbot Medical i.e., Microbot Medical and ArcelorMittal go up and down completely randomly.

Pair Corralation between Microbot Medical and ArcelorMittal

Assuming the 90 days trading horizon Microbot Medical is expected to generate 7.48 times more return on investment than ArcelorMittal. However, Microbot Medical is 7.48 times more volatile than ArcelorMittal SA. It trades about 0.08 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.14 per unit of risk. If you would invest  108.00  in Microbot Medical on December 28, 2024 and sell it today you would earn a total of  37.00  from holding Microbot Medical or generate 34.26% return on investment over 90 days.

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

Microbot Medical  vs.  ArcelorMittal SA

Microbot Medical

Risk-Adjusted Performance

OK

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.

ArcelorMittal SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ArcelorMittal SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ArcelorMittal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microbot Medical and ArcelorMittal

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

The idea behind Microbot Medical and ArcelorMittal SA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.