Correlation Between Microbot Medical and SBI Insurance

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Can any of the company-specific risk be diversified away by investing in both Microbot Medical and SBI Insurance 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 SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and SBI Insurance Group, you can compare the effects of market volatilities on Microbot Medical and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and SBI Insurance.

Diversification Opportunities for Microbot Medical and SBI Insurance

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Microbot and SBI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Microbot Medical i.e., Microbot Medical and SBI Insurance go up and down completely randomly.

Pair Corralation between Microbot Medical and SBI Insurance

Assuming the 90 days trading horizon Microbot Medical is expected to generate 2.33 times less return on investment than SBI Insurance. In addition to that, Microbot Medical is 1.47 times more volatile than SBI Insurance Group. It trades about 0.01 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.02 per unit of volatility. If you would invest  590.00  in SBI Insurance Group on September 23, 2024 and sell it today you would earn a total of  20.00  from holding SBI Insurance Group or generate 3.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Microbot Medical  vs.  SBI Insurance Group

 Performance 
       Timeline  
Microbot Medical 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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.
SBI Insurance Group 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Microbot Medical and SBI Insurance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Microbot Medical and SBI Insurance

The main advantage of trading using opposite Microbot Medical and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.
The idea behind Microbot Medical and SBI Insurance Group 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.
Check out your portfolio center.
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 Valuation module to check real value of public entities based on technical and fundamental data.

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