Correlation Between Boston Omaha and Intuitive Surgical

Can any of the company-specific risk be diversified away by investing in both Boston Omaha 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 Boston Omaha and Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Omaha Corp and Intuitive Surgical, you can compare the effects of market volatilities on Boston Omaha 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 Boston Omaha with a short position of Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Omaha and Intuitive Surgical.

Diversification Opportunities for Boston Omaha and Intuitive Surgical

-0.13

Correlation Coefficient

Boston Omaha  Intuitive Surgical

Good diversification

The 3 months correlation between Boston and Intuitive is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Boston Omaha 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 Boston Omaha Corp 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 Boston Omaha i.e., Boston Omaha and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Boston Omaha and Intuitive Surgical

Considering the 90-day investment horizon Boston Omaha is expected to generate 2.25 times less return on investment than Intuitive Surgical. But when comparing it to its historical volatility, Boston Omaha Corp is 1.24 times less risky than Intuitive Surgical. It trades about 0.17 of its potential returns per unit of risk. Intuitive Surgical is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  52,722  in Intuitive Surgical on October 22, 2024 and sell it today you would earn a total of  6,542  from holding Intuitive Surgical or generate 12.41% return on investment over 90 days.

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

Boston Omaha Corp  vs.  Intuitive Surgical

Boston Omaha Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Omaha Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Boston Omaha is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Intuitive Surgical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Surgical are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Intuitive Surgical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Omaha and Intuitive Surgical

The main advantage of trading using opposite Boston Omaha and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Omaha 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 Boston Omaha Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.