Correlation Between INTUITIVE SURGICAL and SOGECLAIR

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

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

Diversification Opportunities for INTUITIVE SURGICAL and SOGECLAIR

-0.24

Correlation Coefficient

INTUITIVE SURGICAL  SOGECLAIR

Very good diversification

The 3 months correlation between INTUITIVE and SOGECLAIR is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH 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 SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and SOGECLAIR go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and SOGECLAIR

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 0.83 times more return on investment than SOGECLAIR. However, INTUITIVE SURGICAL is 1.21 times less risky than SOGECLAIR. It trades about 0.15 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about -0.03 per unit of risk. If you would invest  44,115  in INTUITIVE SURGICAL on September 16, 2024 and sell it today you would earn a total of  7,685  from holding INTUITIVE SURGICAL or generate 17.42% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  SOGECLAIR SA INH

INTUITIVE SURGICAL

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 11 (%) 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.

SOGECLAIR SA INH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOGECLAIR SA INH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SOGECLAIR is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INTUITIVE SURGICAL and SOGECLAIR

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

The idea behind INTUITIVE SURGICAL and SOGECLAIR SA INH 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.