Correlation Between INTUITIVE SURGICAL and Expat Czech

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

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

Diversification Opportunities for INTUITIVE SURGICAL and Expat Czech

-0.39

Correlation Coefficient

INTUITIVE SURGICAL  Expat Czech

Very good diversification

The 3 months correlation between INTUITIVE and Expat is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Expat Czech PX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Czech PX 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 Expat Czech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Czech PX has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Expat Czech go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Expat Czech

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to under-perform the Expat Czech. In addition to that, INTUITIVE SURGICAL is 2.24 times more volatile than Expat Czech PX. It trades about -0.08 of its total potential returns per unit of risk. Expat Czech PX is currently generating about 0.26 per unit of volatility. If you would invest  149.00  in Expat Czech PX on December 24, 2024 and sell it today you would earn a total of  26.00  from holding Expat Czech PX or generate 17.45% 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.  Expat Czech PX

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.

Expat Czech PX

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Czech PX are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Expat Czech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTUITIVE SURGICAL and Expat Czech

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

The idea behind INTUITIVE SURGICAL and Expat Czech PX 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.