Correlation Between Microbot Medical and SPENN Technology

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

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

Diversification Opportunities for Microbot Medical and SPENN Technology

0.0

Correlation Coefficient

Microbot Medical  SPENN Technology

Pay attention - limited upside

The 3 months correlation between Microbot and SPENN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and SPENN Technology AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPENN Technology 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 SPENN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPENN Technology has no effect on the direction of Microbot Medical i.e., Microbot Medical and SPENN Technology go up and down completely randomly.

Pair Corralation between Microbot Medical and SPENN Technology

Given the investment horizon of 90 days Microbot Medical is expected to generate 3.7 times more return on investment than SPENN Technology. However, Microbot Medical is 3.7 times more volatile than SPENN Technology AS. It trades about 0.01 of its potential returns per unit of risk. SPENN Technology AS is currently generating about -0.06 per unit of risk. If you would invest  312.00  in Microbot Medical on September 19, 2024 and sell it today you would lose (212.00) from holding Microbot Medical or give up 67.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.29%
Values	Daily Returns

Microbot Medical  vs.  SPENN Technology AS

Microbot Medical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

SPENN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Microbot Medical and SPENN Technology

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

The idea behind Microbot Medical and SPENN Technology AS 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.