Correlation Between Intuitive Surgical and Townsquare Media

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

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

Diversification Opportunities for Intuitive Surgical and Townsquare Media

0.43

Correlation Coefficient

Intuitive Surgical  Townsquare Media

Very weak diversification

The 3 months correlation between Intuitive and Townsquare is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Townsquare Media go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Townsquare Media

Given the investment horizon of 90 days Intuitive Surgical is expected to generate 1.01 times more return on investment than Townsquare Media. However, Intuitive Surgical is 1.01 times more volatile than Townsquare Media. It trades about -0.06 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.12 per unit of risk. If you would invest  53,702  in Intuitive Surgical on December 24, 2024 and sell it today you would lose (4,453) from holding Intuitive Surgical or give up 8.29% of portfolio value over 90 days.

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

Intuitive Surgical  vs.  Townsquare Media

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 latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Townsquare Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Townsquare Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Intuitive Surgical and Townsquare Media

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

The idea behind Intuitive Surgical and Townsquare Media 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.