Correlation Between Microbot Medical and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and STMicroelectronics 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 STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and STMicroelectronics NV ADR, you can compare the effects of market volatilities on Microbot Medical and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and STMicroelectronics.
Diversification Opportunities for Microbot Medical and STMicroelectronics
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microbot and STMicroelectronics is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and STMicroelectronics NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics NV ADR 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics NV ADR has no effect on the direction of Microbot Medical i.e., Microbot Medical and STMicroelectronics go up and down completely randomly.
Pair Corralation between Microbot Medical and STMicroelectronics
Given the investment horizon of 90 days Microbot Medical is expected to generate 1.34 times more return on investment than STMicroelectronics. However, Microbot Medical is 1.34 times more volatile than STMicroelectronics NV ADR. It trades about -0.01 of its potential returns per unit of risk. STMicroelectronics NV ADR is currently generating about -0.08 per unit of risk. If you would invest 101.00 in Microbot Medical on September 13, 2024 and sell it today you would lose (1.00) from holding Microbot Medical or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microbot Medical vs. STMicroelectronics NV ADR
Performance |
| Timeline |
| Microbot Medical |
| STMicroelectronics NV ADR |
Microbot Medical and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and STMicroelectronics
The main advantage of trading using opposite Microbot Medical and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
| STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Monolithic Power Systems | STMicroelectronics vs. Globalfoundries | STMicroelectronics vs. Wisekey International Holding |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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