Correlation Between TAL Education and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both TAL Education 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 TAL Education and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Microbot Medical, you can compare the effects of market volatilities on TAL Education 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 TAL Education with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Microbot Medical.
Diversification Opportunities for TAL Education and Microbot Medical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TAL and Microbot is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and TAL Education 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 TAL Education Group 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 TAL Education i.e., TAL Education and Microbot Medical go up and down completely randomly.
Pair Corralation between TAL Education and Microbot Medical
Assuming the 90 days trading horizon TAL Education Group is expected to generate 0.42 times more return on investment than Microbot Medical. However, TAL Education Group is 2.36 times less risky than Microbot Medical. It trades about 0.03 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.01 per unit of risk. If you would invest 804.00 in TAL Education Group on September 14, 2024 and sell it today you would earn a total of 151.00 from holding TAL Education Group or generate 18.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. Microbot Medical
Performance |
| Timeline |
| TAL Education Group |
| Microbot Medical |
TAL Education and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Microbot Medical
The main advantage of trading using opposite TAL Education and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education 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.| TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc |
| Microbot Medical vs. AGNC INVESTMENT | Microbot Medical vs. EAT WELL INVESTMENT | Microbot Medical vs. JLF INVESTMENT | Microbot Medical vs. ADRIATIC METALS LS 013355 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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