Correlation Between Microbot Medical and Guardian Pharmacy

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

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

Diversification Opportunities for Microbot Medical and Guardian Pharmacy

0.4

Correlation Coefficient

Microbot Medical  Guardian Pharmacy

Very weak diversification

The 3 months correlation between Microbot and Guardian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Guardian Pharmacy Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Pharmacy 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 Guardian Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Pharmacy has no effect on the direction of Microbot Medical i.e., Microbot Medical and Guardian Pharmacy go up and down completely randomly.

Pair Corralation between Microbot Medical and Guardian Pharmacy

Given the investment horizon of 90 days Microbot Medical is expected to generate 3.71 times less return on investment than Guardian Pharmacy. But when comparing it to its historical volatility, Microbot Medical is 1.29 times less risky than Guardian Pharmacy. It trades about 0.04 of its potential returns per unit of risk. Guardian Pharmacy Services, is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Guardian Pharmacy Services, on September 30, 2024 and sell it today you would earn a total of  521.00  from holding Guardian Pharmacy Services, or generate 32.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	52.38%
Values	Daily Returns

Microbot Medical  vs.  Guardian Pharmacy Services,

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.

Guardian Pharmacy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Pharmacy Services, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Guardian Pharmacy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microbot Medical and Guardian Pharmacy

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

The idea behind Microbot Medical and Guardian Pharmacy Services, 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.