Correlation Between Microbot Medical and Laureate Education

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

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

Diversification Opportunities for Microbot Medical and Laureate Education

0.21

Correlation Coefficient

Microbot Medical  Laureate Education

Modest diversification

The 3 months correlation between Microbot and Laureate is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of Microbot Medical i.e., Microbot Medical and Laureate Education go up and down completely randomly.

Pair Corralation between Microbot Medical and Laureate Education

Assuming the 90 days trading horizon Microbot Medical is expected to generate 15.29 times more return on investment than Laureate Education. However, Microbot Medical is 15.29 times more volatile than Laureate Education. It trades about 0.09 of its potential returns per unit of risk. Laureate Education is currently generating about 0.08 per unit of risk. If you would invest  94.00  in Microbot Medical on December 3, 2024 and sell it today you would earn a total of  48.00  from holding Microbot Medical or generate 51.06% 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.  Laureate Education

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 uncertain basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Laureate Education

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Laureate Education are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Laureate Education may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Microbot Medical and Laureate Education

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

The idea behind Microbot Medical and Laureate Education 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..