Correlation Between Intuitive Surgical and Futuretech

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

By analyzing existing cross correlation between Intuitive Surgical and Futuretech II Acquisition, you can compare the effects of market volatilities on Intuitive Surgical and Futuretech 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 Futuretech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Futuretech.

Diversification Opportunities for Intuitive Surgical and Futuretech

0.12

Correlation Coefficient

Intuitive Surgical  Futuretech

Average diversification

The 3 months correlation between Intuitive and Futuretech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Futuretech II Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuretech II Acquisition 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 Futuretech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuretech II Acquisition has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Futuretech go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Futuretech

Given the investment horizon of 90 days Intuitive Surgical is expected to under-perform the Futuretech. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Surgical is 1.17 times less risky than Futuretech. The stock trades about -0.04 of its potential returns per unit of risk. The Futuretech II Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,125  in Futuretech II Acquisition on December 23, 2024 and sell it today you would earn a total of  53.00  from holding Futuretech II Acquisition or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.33%
Values	Daily Returns

Intuitive Surgical  vs.  Futuretech II Acquisition

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. Despite nearly stable basic indicators, Intuitive Surgical is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Futuretech II Acquisition

Risk-Adjusted Performance

Insignificant

Over the last 90 days Futuretech II Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady forward indicators, Futuretech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Intuitive Surgical and Futuretech

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

The idea behind Intuitive Surgical and Futuretech II Acquisition 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.