Correlation Between Microbot Medical and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and NETGEAR 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 NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and NETGEAR, you can compare the effects of market volatilities on Microbot Medical and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and NETGEAR.
Diversification Opportunities for Microbot Medical and NETGEAR
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microbot and NETGEAR is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Microbot Medical i.e., Microbot Medical and NETGEAR go up and down completely randomly.
Pair Corralation between Microbot Medical and NETGEAR
Given the investment horizon of 90 days Microbot Medical is expected to under-perform the NETGEAR. In addition to that, Microbot Medical is 3.08 times more volatile than NETGEAR. It trades about 0.0 of its total potential returns per unit of risk. NETGEAR is currently generating about 0.03 per unit of volatility. If you would invest 2,067 in NETGEAR on September 3, 2024 and sell it today you would earn a total of 393.00 from holding NETGEAR or generate 19.01% 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. NETGEAR
Performance |
| Timeline |
| Microbot Medical |
| NETGEAR |
Microbot Medical and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and NETGEAR
The main advantage of trading using opposite Microbot Medical and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
| NETGEAR vs. Hewlett Packard Enterprise | NETGEAR vs. Juniper Networks | NETGEAR vs. Motorola Solutions | NETGEAR vs. Cisco Systems |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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