Correlation Between Microbot Medical and Envista Holdings

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

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

Diversification Opportunities for Microbot Medical and Envista Holdings

0.44

Correlation Coefficient

Microbot Medical  Envista Holdings

Very weak diversification

The 3 months correlation between Microbot and Envista is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Envista Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envista Holdings Corp 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 Envista Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envista Holdings Corp has no effect on the direction of Microbot Medical i.e., Microbot Medical and Envista Holdings go up and down completely randomly.

Pair Corralation between Microbot Medical and Envista Holdings

Given the investment horizon of 90 days Microbot Medical is expected to generate 5.67 times more return on investment than Envista Holdings. However, Microbot Medical is 5.67 times more volatile than Envista Holdings Corp. It trades about 0.08 of its potential returns per unit of risk. Envista Holdings Corp is currently generating about -0.06 per unit of risk. If you would invest  118.00  in Microbot Medical on December 30, 2024 and sell it today you would earn a total of  28.00  from holding Microbot Medical or generate 23.73% return on investment over 90 days.

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

Microbot Medical  vs.  Envista Holdings Corp

Microbot Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 6 (%) 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.

Envista Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Envista Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Microbot Medical and Envista Holdings

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

The idea behind Microbot Medical and Envista Holdings Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.