Correlation Between Microbot Medical and Innovative Eyewear
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and Innovative Eyewear 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 Innovative Eyewear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and Innovative Eyewear, you can compare the effects of market volatilities on Microbot Medical and Innovative Eyewear 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 Innovative Eyewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and Innovative Eyewear.
Diversification Opportunities for Microbot Medical and Innovative Eyewear
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microbot and Innovative is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Innovative Eyewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Eyewear 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 Innovative Eyewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Eyewear has no effect on the direction of Microbot Medical i.e., Microbot Medical and Innovative Eyewear go up and down completely randomly.
Pair Corralation between Microbot Medical and Innovative Eyewear
Given the investment horizon of 90 days Microbot Medical is expected to generate 2.66 times less return on investment than Innovative Eyewear. But when comparing it to its historical volatility, Microbot Medical is 2.28 times less risky than Innovative Eyewear. It trades about 0.03 of its potential returns per unit of risk. Innovative Eyewear is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,460 in Innovative Eyewear on November 2, 2024 and sell it today you would lose (3,931) from holding Innovative Eyewear or give up 88.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microbot Medical vs. Innovative Eyewear
Performance |
| Timeline |
| Microbot Medical |
| Innovative Eyewear |
Microbot Medical and Innovative Eyewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and Innovative Eyewear
The main advantage of trading using opposite Microbot Medical and Innovative Eyewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, Innovative Eyewear 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 Innovative Eyewear will offset losses from the drop in Innovative Eyewear's long position.| Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
| Innovative Eyewear vs. Sharps Technology | Innovative Eyewear vs. JIN MEDICAL INTERNATIONAL | Innovative Eyewear vs. Nexgel Inc | Innovative Eyewear vs. GlucoTrack |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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