Correlation Between Microbot Medical and Genco Shipping

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

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

Diversification Opportunities for Microbot Medical and Genco Shipping

-0.45

Correlation Coefficient

Microbot Medical  Genco Shipping

Very good diversification

The 3 months correlation between Microbot and Genco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading 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 Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of Microbot Medical i.e., Microbot Medical and Genco Shipping go up and down completely randomly.

Pair Corralation between Microbot Medical and Genco Shipping

Assuming the 90 days trading horizon Microbot Medical is expected to generate 10.91 times more return on investment than Genco Shipping. However, Microbot Medical is 10.91 times more volatile than Genco Shipping Trading. It trades about 0.1 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.09 per unit of risk. If you would invest  91.00  in Microbot Medical on November 28, 2024 and sell it today you would earn a total of  55.00  from holding Microbot Medical or generate 60.44% 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.  Genco Shipping Trading

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.

Genco Shipping Trading

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genco Shipping Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic 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 Genco Shipping

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

The idea behind Microbot Medical and Genco Shipping Trading 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.