Correlation Between Microbot Medical and GLOBUS MEDICAL-A

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

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

Diversification Opportunities for Microbot Medical and GLOBUS MEDICAL-A

0.24

Correlation Coefficient

Microbot Medical  GLOBUS MEDICAL-A

Modest diversification

The 3 months correlation between Microbot and GLOBUS is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of Microbot Medical i.e., Microbot Medical and GLOBUS MEDICAL-A go up and down completely randomly.

Pair Corralation between Microbot Medical and GLOBUS MEDICAL-A

Assuming the 90 days trading horizon Microbot Medical is expected to generate 10.24 times more return on investment than GLOBUS MEDICAL-A. However, Microbot Medical is 10.24 times more volatile than GLOBUS MEDICAL A. It trades about 0.13 of its potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about 0.17 per unit of risk. If you would invest  88.00  in Microbot Medical on October 10, 2024 and sell it today you would earn a total of  155.00  from holding Microbot Medical or generate 176.14% return on investment over 90 days.

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

Microbot Medical  vs.  GLOBUS MEDICAL A

Microbot Medical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 10 (%) 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.

GLOBUS MEDICAL A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microbot Medical and GLOBUS MEDICAL-A

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

The idea behind Microbot Medical and GLOBUS MEDICAL A 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.