Correlation Between Regency Centers and Microbot Medical

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

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

Diversification Opportunities for Regency Centers and Microbot Medical

-0.23

Correlation Coefficient

Regency Centers  Microbot Medical

Very good diversification

The 3 months correlation between Regency and Microbot is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Regency Centers 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 Regency Centers 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 Regency Centers i.e., Regency Centers and Microbot Medical go up and down completely randomly.

Pair Corralation between Regency Centers and Microbot Medical

Assuming the 90 days horizon Regency Centers is expected to under-perform the Microbot Medical. But the stock apears to be less risky and, when comparing its historical volatility, Regency Centers is 3.68 times less risky than Microbot Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Microbot Medical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  96.00  in Microbot Medical on September 14, 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Regency Centers  vs.  Microbot Medical

Regency Centers

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Regency Centers has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Regency Centers is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Microbot Medical

Risk-Adjusted Performance

2 of 100

Weak

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 unsteady basic indicators, Microbot Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Regency Centers and Microbot Medical

The main advantage of trading using opposite Regency Centers and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency Centers 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 Regency Centers 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.