Correlation Between AEON STORES and INTUITIVE SURGICAL

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

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

Diversification Opportunities for AEON STORES and INTUITIVE SURGICAL

-0.05

Correlation Coefficient

AEON STORES  INTUITIVE SURGICAL

Good diversification

The 3 months correlation between AEON and INTUITIVE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and AEON STORES 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 AEON STORES 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 AEON STORES i.e., AEON STORES and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between AEON STORES and INTUITIVE SURGICAL

Assuming the 90 days trading horizon AEON STORES is expected to generate 0.24 times more return on investment than INTUITIVE SURGICAL. However, AEON STORES is 4.2 times less risky than INTUITIVE SURGICAL. It trades about 0.12 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about -0.05 per unit of risk. If you would invest  5.65  in AEON STORES on December 30, 2024 and sell it today you would earn a total of  0.25  from holding AEON STORES or generate 4.42% return on investment over 90 days.

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

AEON STORES  vs.  INTUITIVE SURGICAL

AEON STORES

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AEON STORES are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AEON STORES is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

INTUITIVE SURGICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days INTUITIVE SURGICAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with AEON STORES and INTUITIVE SURGICAL

The main advantage of trading using opposite AEON STORES and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES 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 AEON STORES 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.