Correlation Between Dine Brands and Microbot Medical

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

By analyzing existing cross correlation between Dine Brands Global and Microbot Medical, you can compare the effects of market volatilities on Dine Brands and Microbot Medical 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 Dine Brands with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Microbot Medical.

Diversification Opportunities for Dine Brands and Microbot Medical

-0.08

Correlation Coefficient

Dine Brands  Microbot Medical

Good diversification

The 3 months correlation between Dine and Microbot is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Dine Brands 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 Dine Brands Global are associated (or correlated) with Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of Dine Brands i.e., Dine Brands and Microbot Medical go up and down completely randomly.

Pair Corralation between Dine Brands and Microbot Medical

Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the Microbot Medical. But the stock apears to be less risky and, when comparing its historical volatility, Dine Brands Global is 1.49 times less risky than Microbot Medical. The stock trades about -0.31 of its potential returns per unit of risk. The Microbot Medical is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  97.00  in Microbot Medical on September 30, 2024 and sell it today you would earn a total of  14.00  from holding Microbot Medical or generate 14.43% return on investment over 90 days.

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

Dine Brands Global  vs.  Microbot Medical

Dine Brands Global

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Dine Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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

Pair Trading with Dine Brands and Microbot Medical

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

The idea behind Dine Brands Global and Microbot Medical 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.