Correlation Between Microbot Medical and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and WUXI BIOLOGICS 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 WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on Microbot Medical and WUXI BIOLOGICS 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 WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and WUXI BIOLOGICS.
Diversification Opportunities for Microbot Medical and WUXI BIOLOGICS
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microbot and WUXI is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 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 WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of Microbot Medical i.e., Microbot Medical and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between Microbot Medical and WUXI BIOLOGICS
Assuming the 90 days trading horizon Microbot Medical is expected to generate 8.98 times less return on investment than WUXI BIOLOGICS. But when comparing it to its historical volatility, Microbot Medical is 1.5 times less risky than WUXI BIOLOGICS. It trades about 0.03 of its potential returns per unit of risk. WUXI BIOLOGICS UNSPADR2 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 374.00 in WUXI BIOLOGICS UNSPADR2 on September 14, 2024 and sell it today you would earn a total of 64.00 from holding WUXI BIOLOGICS UNSPADR2 or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microbot Medical vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| Microbot Medical |
| WUXI BIOLOGICS UNSPADR2 |
Microbot Medical and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and WUXI BIOLOGICS
The main advantage of trading using opposite Microbot Medical and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc |
| WUXI BIOLOGICS vs. National Health Investors | WUXI BIOLOGICS vs. GUARDANT HEALTH CL | WUXI BIOLOGICS vs. AGF Management Limited | WUXI BIOLOGICS vs. CVS Health |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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