Correlation Between CMS Energy and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both CMS Energy 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 CMS Energy and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMS Energy and Microbot Medical, you can compare the effects of market volatilities on CMS Energy 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 CMS Energy with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and Microbot Medical.
Diversification Opportunities for CMS Energy and Microbot Medical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CMS and Microbot is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and CMS Energy 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 CMS Energy 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 CMS Energy i.e., CMS Energy and Microbot Medical go up and down completely randomly.
Pair Corralation between CMS Energy and Microbot Medical
Assuming the 90 days trading horizon CMS Energy is expected to generate 3.13 times less return on investment than Microbot Medical. But when comparing it to its historical volatility, CMS Energy is 7.11 times less risky than Microbot Medical. It trades about 0.34 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Microbot Medical on May 26, 2025 and sell it today you would earn a total of 115.00 from holding Microbot Medical or generate 42.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMS Energy vs. Microbot Medical
Performance |
| Timeline |
| CMS Energy |
| Microbot Medical |
CMS Energy and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and Microbot Medical
The main advantage of trading using opposite CMS Energy and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy 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.| CMS Energy vs. Entergy Texas | CMS Energy vs. Duke Energy | CMS Energy vs. Spire Inc | CMS Energy vs. Consumers Energy |
| Microbot Medical vs. Bionano Genomics | Microbot Medical vs. Capricor Therapeutics | Microbot Medical vs. Gyre Therapeutics | Microbot Medical vs. Intuitive Surgical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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