Correlation Between PT Semen and Microbot Medical

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

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

Diversification Opportunities for PT Semen and Microbot Medical

-0.45

Correlation Coefficient

PT Semen  Microbot Medical

Very good diversification

The 3 months correlation between PSGTF and Microbot is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Semen Indonesia and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and PT Semen 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 PT Semen Indonesia are associated (or correlated) with Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of PT Semen i.e., PT Semen and Microbot Medical go up and down completely randomly.

Pair Corralation between PT Semen and Microbot Medical

Assuming the 90 days horizon PT Semen Indonesia is expected to under-perform the Microbot Medical. In addition to that, PT Semen is 1.55 times more volatile than Microbot Medical. It trades about -0.16 of its total potential returns per unit of risk. Microbot Medical is currently generating about 0.04 per unit of volatility. If you would invest  96.00  in Microbot Medical on September 15, 2024 and sell it today you would earn a total of  4.00  from holding Microbot Medical or generate 4.17% return on investment over 90 days.

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

PT Semen Indonesia  vs.  Microbot Medical

PT Semen Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Microbot Medical

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Microbot Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Semen and Microbot Medical

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

The idea behind PT Semen Indonesia and Microbot Medical 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.