Correlation Between USU Software and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both USU Software and Microbot Medical 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 USU Software and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USU Software AG and Microbot Medical, you can compare the effects of market volatilities on USU Software and Microbot Medical 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 USU Software with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of USU Software and Microbot Medical.
Diversification Opportunities for USU Software and Microbot Medical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USU and Microbot is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding USU Software AG and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and USU Software 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 USU Software AG are associated (or correlated) with Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of USU Software i.e., USU Software and Microbot Medical go up and down completely randomly.
Pair Corralation between USU Software and Microbot Medical
Assuming the 90 days trading horizon USU Software AG is expected to generate 0.84 times more return on investment than Microbot Medical. However, USU Software AG is 1.19 times less risky than Microbot Medical. It trades about 0.16 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.1 per unit of risk. If you would invest 1,750 in USU Software AG on September 3, 2024 and sell it today you would earn a total of 460.00 from holding USU Software AG or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
USU Software AG vs. Microbot Medical
Performance |
| Timeline |
| USU Software AG |
| Microbot Medical |
USU Software and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USU Software and Microbot Medical
The main advantage of trading using opposite USU Software and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USU Software position performs unexpectedly, Microbot Medical 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 Microbot Medical will offset losses from the drop in Microbot Medical's long position.| USU Software vs. International Business Machines | USU Software vs. FUJITSU LTD ADR | USU Software vs. Superior Plus Corp | USU Software vs. NMI Holdings |
| Microbot Medical vs. MAGIC SOFTWARE ENTR | Microbot Medical vs. Darden Restaurants | Microbot Medical vs. USU Software AG | Microbot Medical vs. Guidewire Software |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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