Correlation Between Intuitive Surgical and Eagle Point

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

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

Diversification Opportunities for Intuitive Surgical and Eagle Point

0.83

Correlation Coefficient

Intuitive Surgical  Eagle Point

Very poor diversification

The 3 months correlation between Intuitive and Eagle is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit and Intuitive Surgical 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 Intuitive Surgical are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Eagle Point go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Eagle Point

Given the investment horizon of 90 days Intuitive Surgical is expected to generate 3.69 times more return on investment than Eagle Point. However, Intuitive Surgical is 3.69 times more volatile than Eagle Point Credit. It trades about 0.11 of its potential returns per unit of risk. Eagle Point Credit is currently generating about 0.06 per unit of risk. If you would invest  36,231  in Intuitive Surgical on October 7, 2024 and sell it today you would earn a total of  17,298  from holding Intuitive Surgical or generate 47.74% return on investment over 90 days.

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

Intuitive Surgical  vs.  Eagle Point Credit

Intuitive Surgical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Surgical are ranked lower than 10 (%) 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.

Eagle Point Credit

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Intuitive Surgical and Eagle Point

The main advantage of trading using opposite Intuitive Surgical and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Eagle Point 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 Eagle Point will offset losses from the drop in Eagle Point's long position.

The idea behind Intuitive Surgical and Eagle Point Credit 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.