Correlation Between Microbot Medical and Warner Music

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

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

Diversification Opportunities for Microbot Medical and Warner Music

0.75

Correlation Coefficient

Microbot Medical  Warner Music

Poor diversification

The 3 months correlation between Microbot and Warner is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of Microbot Medical i.e., Microbot Medical and Warner Music go up and down completely randomly.

Pair Corralation between Microbot Medical and Warner Music

Given the investment horizon of 90 days Microbot Medical is expected to under-perform the Warner Music. In addition to that, Microbot Medical is 3.88 times more volatile than Warner Music Group. It trades about -0.14 of its total potential returns per unit of risk. Warner Music Group is currently generating about -0.19 per unit of volatility. If you would invest  3,350  in Warner Music Group on September 6, 2025 and sell it today you would lose (561.00) from holding Warner Music Group or give up 16.75% of portfolio value over 90 days.

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

Microbot Medical  vs.  Warner Music Group

Microbot Medical

Risk-Adjusted Performance

Weakest

Over the last 90 days Microbot Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2026. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Warner Music Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Warner Music Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Microbot Medical and Warner Music

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

The idea behind Microbot Medical and Warner Music Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.