Correlation Between Geberit AG and INTUITIVE SURGICAL

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

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

Diversification Opportunities for Geberit AG and INTUITIVE SURGICAL

-0.72

Correlation Coefficient

Geberit AG  INTUITIVE SURGICAL

Pay attention - limited upside

The 3 months correlation between Geberit and INTUITIVE is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Geberit AG 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 Geberit AG 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 Geberit AG i.e., Geberit AG and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between Geberit AG and INTUITIVE SURGICAL

Assuming the 90 days trading horizon Geberit AG is expected to generate 1.11 times more return on investment than INTUITIVE SURGICAL. However, Geberit AG is 1.11 times more volatile than INTUITIVE SURGICAL. It trades about 0.07 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about -0.05 per unit of risk. If you would invest  5,400  in Geberit AG on December 30, 2024 and sell it today you would earn a total of  500.00  from holding Geberit AG or generate 9.26% return on investment over 90 days.

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

Geberit AG  vs.  INTUITIVE SURGICAL

Geberit AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Geberit AG may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 Geberit AG and INTUITIVE SURGICAL

The main advantage of trading using opposite Geberit AG and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geberit AG 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 Geberit AG 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.