Correlation Between INTUITIVE SURGICAL and Cobas Global

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

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

Diversification Opportunities for INTUITIVE SURGICAL and Cobas Global

0.53

Correlation Coefficient

INTUITIVE SURGICAL  Cobas Global

Very weak diversification

The 3 months correlation between INTUITIVE and Cobas is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Cobas Global PP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobas Global PP 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 Cobas Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobas Global PP has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Cobas Global go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Cobas Global

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 27.3 times less return on investment than Cobas Global. But when comparing it to its historical volatility, INTUITIVE SURGICAL is 39.0 times less risky than Cobas Global. It trades about 0.09 of its potential returns per unit of risk. Cobas Global PP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  9,419  in Cobas Global PP on October 24, 2024 and sell it today you would earn a total of  3,331  from holding Cobas Global PP or generate 35.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.75%
Values	Daily Returns

INTUITIVE SURGICAL  vs.  Cobas Global PP

INTUITIVE SURGICAL

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 16 (%) 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.

Cobas Global PP

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cobas Global PP are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Cobas Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INTUITIVE SURGICAL and Cobas Global

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

The idea behind INTUITIVE SURGICAL and Cobas Global PP 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.