Correlation Between Microbot Medical and United Airlines
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and United Airlines 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 United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and United Airlines Holdings, you can compare the effects of market volatilities on Microbot Medical and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and United Airlines.
Diversification Opportunities for Microbot Medical and United Airlines
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microbot and United is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Microbot Medical i.e., Microbot Medical and United Airlines go up and down completely randomly.
Pair Corralation between Microbot Medical and United Airlines
Assuming the 90 days trading horizon Microbot Medical is expected to under-perform the United Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Microbot Medical is 1.15 times less risky than United Airlines. The stock trades about -0.04 of its potential returns per unit of risk. The United Airlines Holdings is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 6,771 in United Airlines Holdings on August 25, 2024 and sell it today you would earn a total of 2,213 from holding United Airlines Holdings or generate 32.68% 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. United Airlines Holdings
Performance |
| Timeline |
| Microbot Medical |
| United Airlines Holdings |
Microbot Medical and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and United Airlines
The main advantage of trading using opposite Microbot Medical and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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