Correlation Between Heartbeam and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both Heartbeam 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 Heartbeam and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartbeam and Microbot Medical, you can compare the effects of market volatilities on Heartbeam 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 Heartbeam with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartbeam and Microbot Medical.
Diversification Opportunities for Heartbeam and Microbot Medical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Heartbeam and Microbot is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Heartbeam and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Heartbeam 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 Heartbeam 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 Heartbeam i.e., Heartbeam and Microbot Medical go up and down completely randomly.
Pair Corralation between Heartbeam and Microbot Medical
Given the investment horizon of 90 days Heartbeam is expected to generate 2.1 times more return on investment than Microbot Medical. However, Heartbeam is 2.1 times more volatile than Microbot Medical. It trades about 0.13 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.05 per unit of risk. If you would invest 244.00 in Heartbeam on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Heartbeam or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartbeam vs. Microbot Medical
Performance |
| Timeline |
| Heartbeam |
| Microbot Medical |
Heartbeam and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartbeam and Microbot Medical
The main advantage of trading using opposite Heartbeam and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartbeam 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 Heartbeam 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.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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