Correlation Between Microbot Medical and Pinterest

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

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

Diversification Opportunities for Microbot Medical and Pinterest

0.03

Correlation Coefficient

Microbot Medical  Pinterest

Significant diversification

The 3 months correlation between Microbot and Pinterest is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Microbot Medical i.e., Microbot Medical and Pinterest go up and down completely randomly.

Pair Corralation between Microbot Medical and Pinterest

Given the investment horizon of 90 days Microbot Medical is expected to generate 3.51 times less return on investment than Pinterest. In addition to that, Microbot Medical is 1.11 times more volatile than Pinterest. It trades about 0.02 of its total potential returns per unit of risk. Pinterest is currently generating about 0.08 per unit of volatility. If you would invest  2,886  in Pinterest on September 13, 2024 and sell it today you would earn a total of  307.00  from holding Pinterest or generate 10.64% return on investment over 90 days.

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

Microbot Medical  vs.  Pinterest

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.

Pinterest

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Pinterest may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Microbot Medical and Pinterest

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

The idea behind Microbot Medical and Pinterest 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.