Correlation Between Precision Optics, and Microbot Medical

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

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

Diversification Opportunities for Precision Optics, and Microbot Medical

-0.61

Correlation Coefficient

Precision Optics,  Microbot Medical

Excellent diversification

The 3 months correlation between Precision and Microbot is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Precision Optics, 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 Precision Optics, 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 Precision Optics, i.e., Precision Optics, and Microbot Medical go up and down completely randomly.

Pair Corralation between Precision Optics, and Microbot Medical

Given the investment horizon of 90 days Precision Optics, is expected to under-perform the Microbot Medical. In addition to that, Precision Optics, is 1.55 times more volatile than Microbot Medical. It trades about -0.01 of its total potential returns per unit of risk. Microbot Medical is currently generating about 0.07 per unit of volatility. If you would invest  87.00  in Microbot Medical on August 31, 2024 and sell it today you would earn a total of  10.00  from holding Microbot Medical or generate 11.49% return on investment over 90 days.

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

Precision Optics,  vs.  Microbot Medical

Precision Optics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precision Optics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Precision Optics, is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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 unsteady basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Precision Optics, and Microbot Medical

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

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.