Correlation Between ResMed and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both ResMed 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 ResMed and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Microbot Medical, you can compare the effects of market volatilities on ResMed 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 ResMed with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Microbot Medical.
Diversification Opportunities for ResMed and Microbot Medical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ResMed and Microbot is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and ResMed 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 ResMed Inc 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 ResMed i.e., ResMed and Microbot Medical go up and down completely randomly.
Pair Corralation between ResMed and Microbot Medical
Considering the 90-day investment horizon ResMed is expected to generate 24.79 times less return on investment than Microbot Medical. But when comparing it to its historical volatility, ResMed Inc is 23.47 times less risky than Microbot Medical. It trades about 0.19 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.21 of returns per unit of risk over similar time horizon. 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 |
ResMed Inc vs. Microbot Medical
Performance |
| Timeline |
| ResMed Inc |
| Microbot Medical |
ResMed and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ResMed and Microbot Medical
The main advantage of trading using opposite ResMed and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed 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.| ResMed vs. Teleflex Incorporated | ResMed vs. West Pharmaceutical Services | ResMed vs. Alcon AG | ResMed vs. ICU Medical |
| Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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