Correlation Between Microbot Medical and Sekisui House

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

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

Diversification Opportunities for Microbot Medical and Sekisui House

0.18

Correlation Coefficient

Microbot Medical  Sekisui House

Average diversification

The 3 months correlation between Microbot and Sekisui is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Sekisui House Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui House 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 Sekisui House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui House has no effect on the direction of Microbot Medical i.e., Microbot Medical and Sekisui House go up and down completely randomly.

Pair Corralation between Microbot Medical and Sekisui House

Given the investment horizon of 90 days Microbot Medical is expected to generate 11.53 times more return on investment than Sekisui House. However, Microbot Medical is 11.53 times more volatile than Sekisui House Ltd. It trades about 0.08 of its potential returns per unit of risk. Sekisui House Ltd is currently generating about -0.07 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Microbot Medical  vs.  Sekisui House Ltd

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.

Sekisui House

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sekisui House Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sekisui House is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Microbot Medical and Sekisui House

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

The idea behind Microbot Medical and Sekisui House Ltd 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.