Correlation Between Microbot Medical and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and SunLink Health 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 SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and SunLink Health Systems, you can compare the effects of market volatilities on Microbot Medical and SunLink Health 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and SunLink Health.
Diversification Opportunities for Microbot Medical and SunLink Health
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microbot and SunLink is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Microbot Medical i.e., Microbot Medical and SunLink Health go up and down completely randomly.
Pair Corralation between Microbot Medical and SunLink Health
Given the investment horizon of 90 days Microbot Medical is expected to generate 0.44 times more return on investment than SunLink Health. However, Microbot Medical is 2.25 times less risky than SunLink Health. It trades about 0.16 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.06 per unit of risk. If you would invest 90.00 in Microbot Medical on September 19, 2024 and sell it today you would earn a total of 7.00 from holding Microbot Medical or generate 7.78% 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. SunLink Health Systems
Performance |
| Timeline |
| Microbot Medical |
| SunLink Health Systems |
Microbot Medical and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and SunLink Health
The main advantage of trading using opposite Microbot Medical and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.The idea behind Microbot Medical and SunLink Health Systems 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.| SunLink Health vs. ASGN Inc | SunLink Health vs. Kforce Inc | SunLink Health vs. Kelly Services A | SunLink Health vs. Central Garden Pet |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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