Correlation Between Gap, and Microbot Medical

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

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

Diversification Opportunities for Gap, and Microbot Medical

-0.42

Correlation Coefficient

Gap,  Microbot Medical

Very good diversification

The 3 months correlation between Gap, and Microbot is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Gap, 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 The Gap, 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 Gap, i.e., Gap, and Microbot Medical go up and down completely randomly.

Pair Corralation between Gap, and Microbot Medical

Considering the 90-day investment horizon The Gap, is expected to generate 0.35 times more return on investment than Microbot Medical. However, The Gap, is 2.83 times less risky than Microbot Medical. It trades about -0.24 of its potential returns per unit of risk. Microbot Medical is currently generating about -0.15 per unit of risk. If you would invest  2,311  in The Gap, on December 4, 2024 and sell it today you would lose (302.00) from holding The Gap, or give up 13.07% of portfolio value over 90 days.

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

The Gap,  vs.  Microbot Medical

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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

Pair Trading with Gap, and Microbot Medical

The main advantage of trading using opposite Gap, and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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 The Gap, 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.