Correlation Between Microbot Medical and Becton Dickinson

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

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

Diversification Opportunities for Microbot Medical and Becton Dickinson

0.11

Correlation Coefficient

Microbot Medical  Becton Dickinson

Average diversification

The 3 months correlation between Microbot and Becton is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Becton Dickinson and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson 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 Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson has no effect on the direction of Microbot Medical i.e., Microbot Medical and Becton Dickinson go up and down completely randomly.

Pair Corralation between Microbot Medical and Becton Dickinson

Given the investment horizon of 90 days Microbot Medical is expected to under-perform the Becton Dickinson. In addition to that, Microbot Medical is 3.22 times more volatile than Becton Dickinson and. It trades about -0.23 of its total potential returns per unit of risk. Becton Dickinson and is currently generating about -0.06 per unit of volatility. If you would invest  23,787  in Becton Dickinson and on January 20, 2024 and sell it today you would lose (472.00) from holding Becton Dickinson and or give up 1.98% of portfolio value over 90 days.

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

Microbot Medical  vs.  Becton Dickinson and

Microbot Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Microbot Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Becton Dickinson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Becton Dickinson and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Becton Dickinson is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Microbot Medical and Becton Dickinson

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

The idea behind Microbot Medical and Becton Dickinson and 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..