Correlation Between International Game and INTUITIVE SURGICAL

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

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

Diversification Opportunities for International Game and INTUITIVE SURGICAL

-0.5

Correlation Coefficient

International Game  INTUITIVE SURGICAL

Very good diversification

The 3 months correlation between International and INTUITIVE is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and International Game 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 International Game Technology 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 International Game i.e., International Game and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between International Game and INTUITIVE SURGICAL

Assuming the 90 days horizon International Game Technology is expected to under-perform the INTUITIVE SURGICAL. In addition to that, International Game is 1.01 times more volatile than INTUITIVE SURGICAL. It trades about -0.06 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.06 per unit of volatility. If you would invest  51,220  in INTUITIVE SURGICAL on December 2, 2024 and sell it today you would earn a total of  2,670  from holding INTUITIVE SURGICAL or generate 5.21% return on investment over 90 days.

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

International Game Technology  vs.  INTUITIVE SURGICAL

International Game

Risk-Adjusted Performance

Very Weak

Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

INTUITIVE SURGICAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, INTUITIVE SURGICAL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with International Game and INTUITIVE SURGICAL

The main advantage of trading using opposite International Game and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game 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 International Game Technology 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.