Correlation Between Nuwellis and Microbot Medical

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

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

Diversification Opportunities for Nuwellis and Microbot Medical

0.47

Correlation Coefficient

Nuwellis  Microbot Medical

Very weak diversification

The 3 months correlation between Nuwellis and Microbot is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nuwellis and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Nuwellis 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 Nuwellis 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 Nuwellis i.e., Nuwellis and Microbot Medical go up and down completely randomly.

Pair Corralation between Nuwellis and Microbot Medical

Given the investment horizon of 90 days Nuwellis is expected to generate 9.55 times more return on investment than Microbot Medical. However, Nuwellis is 9.55 times more volatile than Microbot Medical. It trades about 0.04 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.05 per unit of risk. If you would invest  182.00  in Nuwellis on August 30, 2024 and sell it today you would lose (44.00) from holding Nuwellis or give up 24.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nuwellis  vs.  Microbot Medical

Nuwellis

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuwellis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Nuwellis exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Nuwellis and Microbot Medical

The main advantage of trading using opposite Nuwellis and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuwellis 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.

The idea behind Nuwellis and Microbot Medical 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.