Correlation Between GMS and Microbot Medical

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

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

Diversification Opportunities for GMS and Microbot Medical

-0.61

Correlation Coefficient

GMS  Microbot Medical

Excellent diversification

The 3 months correlation between GMS and Microbot is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and GMS 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 GMS Inc 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 GMS i.e., GMS and Microbot Medical go up and down completely randomly.

Pair Corralation between GMS and Microbot Medical

Considering the 90-day investment horizon GMS Inc is expected to under-perform the Microbot Medical. But the stock apears to be less risky and, when comparing its historical volatility, GMS Inc is 9.55 times less risky than Microbot Medical. The stock trades about -0.29 of its potential returns per unit of risk. The Microbot Medical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Microbot Medical on December 4, 2024 and sell it today you would earn a total of  37.00  from holding Microbot Medical or generate 37.37% return on investment over 90 days.

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

GMS Inc  vs.  Microbot Medical

GMS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days GMS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 GMS and Microbot Medical

The main advantage of trading using opposite GMS and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS 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 GMS Inc 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.