Correlation Between Microbot Medical and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and Oatly Group 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 Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and Oatly Group AB, you can compare the effects of market volatilities on Microbot Medical and Oatly Group 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 Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and Oatly Group.
Diversification Opportunities for Microbot Medical and Oatly Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microbot and Oatly is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB 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 Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Microbot Medical i.e., Microbot Medical and Oatly Group go up and down completely randomly.
Pair Corralation between Microbot Medical and Oatly Group
Given the investment horizon of 90 days Microbot Medical is expected to generate 0.67 times more return on investment than Oatly Group. However, Microbot Medical is 1.49 times less risky than Oatly Group. It trades about 0.04 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.05 per unit of risk. If you would invest 95.00 in Microbot Medical on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Microbot Medical or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microbot Medical vs. Oatly Group AB
Performance |
| Timeline |
| Microbot Medical |
| Oatly Group AB |
Microbot Medical and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and Oatly Group
The main advantage of trading using opposite Microbot Medical and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, Oatly Group 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 Oatly Group will offset losses from the drop in Oatly Group's long position.The idea behind Microbot Medical and Oatly Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Oatly Group vs. Bellring Brands LLC | Oatly Group vs. Ingredion Incorporated | Oatly Group vs. Nomad Foods | Oatly Group vs. Simply Good Foods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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