Correlation Between INTUITIVE SURGICAL and NORDIC HALIBUT

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

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

Diversification Opportunities for INTUITIVE SURGICAL and NORDIC HALIBUT

-0.6

Correlation Coefficient

INTUITIVE SURGICAL  NORDIC HALIBUT

Excellent diversification

The 3 months correlation between INTUITIVE and NORDIC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS 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 NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and NORDIC HALIBUT go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and NORDIC HALIBUT

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to under-perform the NORDIC HALIBUT. In addition to that, INTUITIVE SURGICAL is 1.31 times more volatile than NORDIC HALIBUT AS. It trades about -0.05 of its total potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about 0.02 per unit of volatility. If you would invest  170.00  in NORDIC HALIBUT AS on December 30, 2024 and sell it today you would earn a total of  3.00  from holding NORDIC HALIBUT AS or generate 1.76% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  NORDIC HALIBUT AS

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 unsteady 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.

NORDIC HALIBUT AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NORDIC HALIBUT AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, NORDIC HALIBUT is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INTUITIVE SURGICAL and NORDIC HALIBUT

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

The idea behind INTUITIVE SURGICAL and NORDIC HALIBUT AS 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.