Correlation Between Microbot Medical and Ecovyst

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

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

Diversification Opportunities for Microbot Medical and Ecovyst

0.24

Correlation Coefficient

Microbot Medical  Ecovyst

Modest diversification

The 3 months correlation between Microbot and Ecovyst is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of Microbot Medical i.e., Microbot Medical and Ecovyst go up and down completely randomly.

Pair Corralation between Microbot Medical and Ecovyst

Given the investment horizon of 90 days Microbot Medical is expected to generate 4.86 times less return on investment than Ecovyst. But when comparing it to its historical volatility, Microbot Medical is 1.02 times less risky than Ecovyst. It trades about 0.02 of its potential returns per unit of risk. Ecovyst is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  668.00  in Ecovyst on September 13, 2024 and sell it today you would earn a total of  104.00  from holding Ecovyst or generate 15.57% 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.  Ecovyst

Microbot Medical

Risk-Adjusted Performance

1 of 100

Insignificant

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.

Ecovyst

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ecovyst are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Ecovyst unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microbot Medical and Ecovyst

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

The idea behind Microbot Medical and Ecovyst 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.