Correlation Between Microbot Medical and GungHo Online

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

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

Diversification Opportunities for Microbot Medical and GungHo Online

0.66

Correlation Coefficient

Microbot Medical  GungHo Online

Poor diversification

The 3 months correlation between Microbot and GungHo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert 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 GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of Microbot Medical i.e., Microbot Medical and GungHo Online go up and down completely randomly.

Pair Corralation between Microbot Medical and GungHo Online

Assuming the 90 days trading horizon Microbot Medical is expected to generate 9.84 times more return on investment than GungHo Online. However, Microbot Medical is 9.84 times more volatile than GungHo Online Entertainment. It trades about 0.1 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.05 per unit of risk. If you would invest  91.00  in Microbot Medical on November 29, 2024 and sell it today you would earn a total of  54.00  from holding Microbot Medical or generate 59.34% return on investment over 90 days.

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

Microbot Medical  vs.  GungHo Online Entertainment

Microbot Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 7 (%) 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.

GungHo Online Entert

Risk-Adjusted Performance

Weak

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

Pair Trading with Microbot Medical and GungHo Online

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

The idea behind Microbot Medical and GungHo Online Entertainment 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.