Correlation Between INTUITIVE SURGICAL and Naranja Renta

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

By analyzing existing cross correlation between INTUITIVE SURGICAL and Naranja Renta Fija, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Naranja Renta 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 Naranja Renta. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Naranja Renta.

Diversification Opportunities for INTUITIVE SURGICAL and Naranja Renta

0.55

Correlation Coefficient

INTUITIVE SURGICAL  Naranja Renta

Very weak diversification

The 3 months correlation between INTUITIVE and Naranja is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Naranja Renta Fija in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naranja Renta Fija 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 Naranja Renta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naranja Renta Fija has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Naranja Renta go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Naranja Renta

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 32.88 times more return on investment than Naranja Renta. However, INTUITIVE SURGICAL is 32.88 times more volatile than Naranja Renta Fija. It trades about 0.13 of its potential returns per unit of risk. Naranja Renta Fija is currently generating about 0.38 per unit of risk. If you would invest  48,410  in INTUITIVE SURGICAL on October 9, 2024 and sell it today you would earn a total of  3,490  from holding INTUITIVE SURGICAL or generate 7.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.11%
Values	Daily Returns

INTUITIVE SURGICAL  vs.  Naranja Renta Fija

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. In spite of rather fragile technical and fundamental indicators, INTUITIVE SURGICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Naranja Renta Fija

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Naranja Renta Fija has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Naranja Renta is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with INTUITIVE SURGICAL and Naranja Renta

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

The idea behind INTUITIVE SURGICAL and Naranja Renta Fija 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.