Correlation Between Microbot Medical and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and Volkswagen 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 Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and Volkswagen AG, you can compare the effects of market volatilities on Microbot Medical and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and Volkswagen.
Diversification Opportunities for Microbot Medical and Volkswagen
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microbot and Volkswagen is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Microbot Medical i.e., Microbot Medical and Volkswagen go up and down completely randomly.
Pair Corralation between Microbot Medical and Volkswagen
Assuming the 90 days trading horizon Microbot Medical is expected to generate 2.52 times more return on investment than Volkswagen. However, Microbot Medical is 2.52 times more volatile than Volkswagen AG. It trades about 0.17 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.33 per unit of risk. If you would invest 85.00 in Microbot Medical on September 4, 2024 and sell it today you would earn a total of 9.00 from holding Microbot Medical or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microbot Medical vs. Volkswagen AG
Performance |
| Timeline |
| Microbot Medical |
| Volkswagen AG |
Microbot Medical and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and Volkswagen
The main advantage of trading using opposite Microbot Medical and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc |
| Volkswagen vs. SOUTHWEST AIRLINES | Volkswagen vs. MITSUBISHI STEEL MFG | Volkswagen vs. Nok Airlines PCL | Volkswagen vs. Daido Steel Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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