Correlation Between Arm Holdings and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both Arm Holdings 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 Arm Holdings and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arm Holdings plc and Microbot Medical, you can compare the effects of market volatilities on Arm Holdings 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 Arm Holdings with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arm Holdings and Microbot Medical.
Diversification Opportunities for Arm Holdings and Microbot Medical
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arm and Microbot is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Arm Holdings plc and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Arm Holdings 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 Arm Holdings plc 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 Arm Holdings i.e., Arm Holdings and Microbot Medical go up and down completely randomly.
Pair Corralation between Arm Holdings and Microbot Medical
Considering the 90-day investment horizon Arm Holdings plc is expected to generate 1.21 times more return on investment than Microbot Medical. However, Arm Holdings is 1.21 times more volatile than Microbot Medical. It trades about -0.07 of its potential returns per unit of risk. Microbot Medical is currently generating about -0.12 per unit of risk. If you would invest 14,241 in Arm Holdings plc on August 24, 2024 and sell it today you would lose (927.00) from holding Arm Holdings plc or give up 6.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arm Holdings plc vs. Microbot Medical
Performance |
| Timeline |
| Arm Holdings plc |
| Microbot Medical |
Arm Holdings and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arm Holdings and Microbot Medical
The main advantage of trading using opposite Arm Holdings and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arm Holdings 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.| Arm Holdings vs. Eshallgo Class A | Arm Holdings vs. Amtech Systems | Arm Holdings vs. Gold Fields Ltd | Arm Holdings vs. Aegean Airlines SA |
| Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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