Correlation Between INTUITIVE SURGICAL and Renaissance Europe

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

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

Diversification Opportunities for INTUITIVE SURGICAL and Renaissance Europe

0.54

Correlation Coefficient

INTUITIVE SURGICAL  Renaissance Europe

Very weak diversification

The 3 months correlation between INTUITIVE and Renaissance is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Renaissance Europe Z in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renaissance Europe 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 Renaissance Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renaissance Europe has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Renaissance Europe go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Renaissance Europe

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to under-perform the Renaissance Europe. In addition to that, INTUITIVE SURGICAL is 2.71 times more volatile than Renaissance Europe Z. It trades about -0.05 of its total potential returns per unit of risk. Renaissance Europe Z is currently generating about 0.03 per unit of volatility. If you would invest  26,789  in Renaissance Europe Z on December 28, 2024 and sell it today you would earn a total of  379.00  from holding Renaissance Europe Z or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

INTUITIVE SURGICAL  vs.  Renaissance Europe Z

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. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Renaissance Europe

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Renaissance Europe Z are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Renaissance Europe is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with INTUITIVE SURGICAL and Renaissance Europe

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

The idea behind INTUITIVE SURGICAL and Renaissance Europe Z 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.