Correlation Between Microbot Medical and ResMed
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and ResMed 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 ResMed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and ResMed Inc, you can compare the effects of market volatilities on Microbot Medical and ResMed 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 ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and ResMed.
Diversification Opportunities for Microbot Medical and ResMed
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microbot and ResMed is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc 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 ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Microbot Medical i.e., Microbot Medical and ResMed go up and down completely randomly.
Pair Corralation between Microbot Medical and ResMed
Given the investment horizon of 90 days Microbot Medical is expected to generate 23.47 times more return on investment than ResMed. However, Microbot Medical is 23.47 times more volatile than ResMed Inc. It trades about 0.21 of its potential returns per unit of risk. ResMed Inc is currently generating about 0.19 per unit of risk. If you would invest 97.00 in Microbot Medical on October 22, 2024 and sell it today you would earn a total of 67.00 from holding Microbot Medical or generate 69.07% 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. ResMed Inc
Performance |
| Timeline |
| Microbot Medical |
| ResMed Inc |
Microbot Medical and ResMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and ResMed
The main advantage of trading using opposite Microbot Medical and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.| Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
| ResMed vs. Teleflex Incorporated | ResMed vs. West Pharmaceutical Services | ResMed vs. Alcon AG | ResMed vs. ICU Medical |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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