Correlation Between Intuitive Surgical and Weyco

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

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

Diversification Opportunities for Intuitive Surgical and Weyco

0.25

Correlation Coefficient

Intuitive Surgical  Weyco

Modest diversification

The 3 months correlation between Intuitive and Weyco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Weyco go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Weyco

Given the investment horizon of 90 days Intuitive Surgical is expected to generate 1.52 times more return on investment than Weyco. However, Intuitive Surgical is 1.52 times more volatile than Weyco Group. It trades about 0.31 of its potential returns per unit of risk. Weyco Group is currently generating about -0.18 per unit of risk. If you would invest  52,722  in Intuitive Surgical on October 22, 2024 and sell it today you would earn a total of  6,542  from holding Intuitive Surgical or generate 12.41% return on investment over 90 days.

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

Intuitive Surgical  vs.  Weyco Group

Intuitive Surgical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Surgical are ranked lower than 12 (%) 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.

Weyco Group

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Intuitive Surgical and Weyco

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

The idea behind Intuitive Surgical and Weyco Group 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.