Correlation Between Microbot Medical and Britvic Plc
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and Britvic Plc 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 Britvic Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and Britvic plc, you can compare the effects of market volatilities on Microbot Medical and Britvic Plc 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 Britvic Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and Britvic Plc.
Diversification Opportunities for Microbot Medical and Britvic Plc
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microbot and Britvic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Britvic plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Britvic plc 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 Britvic Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Britvic plc has no effect on the direction of Microbot Medical i.e., Microbot Medical and Britvic Plc go up and down completely randomly.
Pair Corralation between Microbot Medical and Britvic Plc
Assuming the 90 days trading horizon Microbot Medical is expected to generate 5.88 times more return on investment than Britvic Plc. However, Microbot Medical is 5.88 times more volatile than Britvic plc. It trades about 0.03 of its potential returns per unit of risk. Britvic plc is currently generating about 0.06 per unit of risk. If you would invest 93.00 in Microbot Medical on September 14, 2024 and sell it today you would earn a total of 1.00 from holding Microbot Medical or generate 1.08% 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. Britvic plc
Performance |
| Timeline |
| Microbot Medical |
| Britvic plc |
Microbot Medical and Britvic Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and Britvic Plc
The main advantage of trading using opposite Microbot Medical and Britvic Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, Britvic Plc 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 Britvic Plc will offset losses from the drop in Britvic Plc's long position.| Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc |
| Britvic Plc vs. Alfa Financial Software | Britvic Plc vs. Martin Marietta Materials | Britvic Plc vs. EAGLE MATERIALS | Britvic Plc vs. VULCAN MATERIALS |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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