Correlation Between Echiquier Major and INTUITIVE SURGICAL

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

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

Diversification Opportunities for Echiquier Major and INTUITIVE SURGICAL

0.23

Correlation Coefficient

Echiquier Major  INTUITIVE SURGICAL

Modest diversification

The 3 months correlation between Echiquier and INTUITIVE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Echiquier Major SRI and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Echiquier Major 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 Echiquier Major SRI are associated (or correlated) with INTUITIVE SURGICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTUITIVE SURGICAL has no effect on the direction of Echiquier Major i.e., Echiquier Major and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between Echiquier Major and INTUITIVE SURGICAL

Assuming the 90 days trading horizon Echiquier Major is expected to generate 4.97 times less return on investment than INTUITIVE SURGICAL. But when comparing it to its historical volatility, Echiquier Major SRI is 2.5 times less risky than INTUITIVE SURGICAL. It trades about 0.07 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  43,495  in INTUITIVE SURGICAL on September 22, 2024 and sell it today you would earn a total of  6,705  from holding INTUITIVE SURGICAL or generate 15.42% return on investment over 90 days.

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

Echiquier Major SRI  vs.  INTUITIVE SURGICAL

Echiquier Major SRI

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Echiquier Major SRI are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Echiquier Major is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

INTUITIVE SURGICAL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, INTUITIVE SURGICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Echiquier Major and INTUITIVE SURGICAL

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

The idea behind Echiquier Major SRI and INTUITIVE SURGICAL 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..