Correlation Between Microbot Medical and Plum Acquisition

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

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

Diversification Opportunities for Microbot Medical and Plum Acquisition

0.25

Correlation Coefficient

Microbot Medical  Plum Acquisition

Modest diversification

The 3 months correlation between Microbot and Plum is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Plum Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plum Acquisition 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 Plum Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plum Acquisition Corp has no effect on the direction of Microbot Medical i.e., Microbot Medical and Plum Acquisition go up and down completely randomly.

Pair Corralation between Microbot Medical and Plum Acquisition

Given the investment horizon of 90 days Microbot Medical is expected to generate 9.02 times more return on investment than Plum Acquisition. However, Microbot Medical is 9.02 times more volatile than Plum Acquisition Corp. It trades about 0.02 of its potential returns per unit of risk. Plum Acquisition Corp is currently generating about 0.03 per unit of risk. If you would invest  331.00  in Microbot Medical on October 12, 2024 and sell it today you would lose (138.00) from holding Microbot Medical or give up 41.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.2%
Values	Daily Returns

Microbot Medical  vs.  Plum Acquisition Corp

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 unsteady basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Plum Acquisition Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Plum Acquisition Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, Plum Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Microbot Medical and Plum Acquisition

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

The idea behind Microbot Medical and Plum Acquisition 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.