Correlation Between Microbot Medical and OraSure Technologies

Can any of the company-specific risk be diversified away by investing in both Microbot Medical and OraSure Technologies 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 OraSure Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Microbot Medical and OraSure Technologies, you can compare the effects of market volatilities on Microbot Medical and OraSure Technologies 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 OraSure Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and OraSure Technologies.

Diversification Opportunities for Microbot Medical and OraSure Technologies

-0.33

Correlation Coefficient

Microbot Medical  OraSure Technologies

Very good diversification

The 3 months correlation between Microbot and OraSure is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and OraSure Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OraSure Technologies 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 OraSure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OraSure Technologies has no effect on the direction of Microbot Medical i.e., Microbot Medical and OraSure Technologies go up and down completely randomly.

Pair Corralation between Microbot Medical and OraSure Technologies

Given the investment horizon of 90 days Microbot Medical is expected to generate 1.45 times more return on investment than OraSure Technologies. However, Microbot Medical is 1.45 times more volatile than OraSure Technologies. It trades about 0.07 of its potential returns per unit of risk. OraSure Technologies is currently generating about -0.11 per unit of risk. If you would invest  88.00  in Microbot Medical on August 30, 2024 and sell it today you would earn a total of  9.00  from holding Microbot Medical or generate 10.23% 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.  OraSure Technologies

Microbot Medical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Microbot Medical may actually be approaching a critical reversion point that can send shares even higher in December 2024.

OraSure Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OraSure Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Microbot Medical and OraSure Technologies

The main advantage of trading using opposite Microbot Medical and OraSure Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, OraSure Technologies 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 OraSure Technologies will offset losses from the drop in OraSure Technologies' long position.

The idea behind Microbot Medical and OraSure Technologies 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.