Correlation Between Intuitive Surgical and CROWN

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

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

Diversification Opportunities for Intuitive Surgical and CROWN

0.09

Correlation Coefficient

Intuitive Surgical  CROWN

Significant diversification

The 3 months correlation between Intuitive and CROWN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and CROWN CASTLE INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTL 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTL has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and CROWN go up and down completely randomly.

Pair Corralation between Intuitive Surgical and CROWN

Given the investment horizon of 90 days Intuitive Surgical is expected to under-perform the CROWN. In addition to that, Intuitive Surgical is 7.55 times more volatile than CROWN CASTLE INTL. It trades about -0.02 of its total potential returns per unit of risk. CROWN CASTLE INTL is currently generating about -0.05 per unit of volatility. If you would invest  9,815  in CROWN CASTLE INTL on December 26, 2024 and sell it today you would lose (85.00) from holding CROWN CASTLE INTL or give up 0.87% of portfolio value over 90 days.

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

Intuitive Surgical  vs.  CROWN CASTLE INTL

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.

CROWN CASTLE INTL

Risk-Adjusted Performance

Insignificant

Over the last 90 days CROWN CASTLE INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intuitive Surgical and CROWN

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

The idea behind Intuitive Surgical and CROWN CASTLE INTL 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.