Correlation Between Inflection Point and Microbot Medical

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

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

Diversification Opportunities for Inflection Point and Microbot Medical

0.25

Correlation Coefficient

Inflection Point  Microbot Medical

Modest diversification

The 3 months correlation between Inflection and Microbot is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Microbot Medical go up and down completely randomly.

Pair Corralation between Inflection Point and Microbot Medical

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 1.08 times more return on investment than Microbot Medical. However, Inflection Point is 1.08 times more volatile than Microbot Medical. It trades about 0.18 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.02 per unit of risk. If you would invest  1,075  in Inflection Point Acquisition on September 13, 2024 and sell it today you would earn a total of  415.00  from holding Inflection Point Acquisition or generate 38.6% return on investment over 90 days.

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

Inflection Point Acquisition  vs.  Microbot Medical

Inflection Point Acq

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Microbot Medical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Microbot Medical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Inflection Point and Microbot Medical

The main advantage of trading using opposite Inflection Point and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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 Inflection Point Acquisition 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.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.