Correlation Between INTUITIVE SURGICAL and GFL ENVIRONM(SUBVTSH

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

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

Diversification Opportunities for INTUITIVE SURGICAL and GFL ENVIRONM(SUBVTSH

0.93

Correlation Coefficient

INTUITIVE SURGICAL  GFL ENVIRONM(SUBVTSH

Almost no diversification

The 3 months correlation between INTUITIVE and GFL is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM(SUBVTSH has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and GFL ENVIRONM(SUBVTSH go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and GFL ENVIRONM(SUBVTSH

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 1.02 times more return on investment than GFL ENVIRONM(SUBVTSH. However, INTUITIVE SURGICAL is 1.02 times more volatile than GFL ENVIRONM. It trades about 0.13 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.12 per unit of risk. If you would invest  44,475  in INTUITIVE SURGICAL on September 2, 2024 and sell it today you would earn a total of  6,725  from holding INTUITIVE SURGICAL or generate 15.12% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  GFL ENVIRONM

INTUITIVE SURGICAL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, INTUITIVE SURGICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

GFL ENVIRONM(SUBVTSH

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GFL ENVIRONM are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GFL ENVIRONM(SUBVTSH may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with INTUITIVE SURGICAL and GFL ENVIRONM(SUBVTSH

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

The idea behind INTUITIVE SURGICAL and GFL ENVIRONM 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.