Correlation Between Cofina SGPS and INTUITIVE SURGICAL

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

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

Diversification Opportunities for Cofina SGPS and INTUITIVE SURGICAL

-0.31

Correlation Coefficient

Cofina SGPS  INTUITIVE SURGICAL

Very good diversification

The 3 months correlation between Cofina and INTUITIVE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cofina SGPS SA and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Cofina SGPS 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 Cofina SGPS SA 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 Cofina SGPS i.e., Cofina SGPS and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between Cofina SGPS and INTUITIVE SURGICAL

Assuming the 90 days horizon Cofina SGPS SA is expected to under-perform the INTUITIVE SURGICAL. In addition to that, Cofina SGPS is 10.58 times more volatile than INTUITIVE SURGICAL. It trades about -0.05 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.36 per unit of volatility. If you would invest  50,200  in INTUITIVE SURGICAL on October 24, 2024 and sell it today you would earn a total of  7,300  from holding INTUITIVE SURGICAL or generate 14.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Cofina SGPS SA  vs.  INTUITIVE SURGICAL

Cofina SGPS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cofina SGPS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cofina SGPS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

INTUITIVE SURGICAL

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile 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 Cofina SGPS and INTUITIVE SURGICAL

The main advantage of trading using opposite Cofina SGPS and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofina SGPS 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 Cofina SGPS SA 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.