Correlation Between INTUITIVE SURGICAL and Invesco Euro

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

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

Diversification Opportunities for INTUITIVE SURGICAL and Invesco Euro

0.71

Correlation Coefficient

INTUITIVE SURGICAL  Invesco Euro

Poor diversification

The 3 months correlation between INTUITIVE and Invesco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Invesco Euro Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Euro Corporate 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 Invesco Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Euro Corporate has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Invesco Euro go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Invesco Euro

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 9.27 times more return on investment than Invesco Euro. However, INTUITIVE SURGICAL is 9.27 times more volatile than Invesco Euro Corporate. It trades about 0.0 of its potential returns per unit of risk. Invesco Euro Corporate is currently generating about -0.46 per unit of risk. If you would invest  51,900  in INTUITIVE SURGICAL on October 9, 2024 and sell it today you would lose (30.00) from holding INTUITIVE SURGICAL or give up 0.06% of portfolio value over 90 days.

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

INTUITIVE SURGICAL  vs.  Invesco Euro Corporate

INTUITIVE SURGICAL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 12 (%) 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.

Invesco Euro Corporate

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Euro Corporate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Invesco Euro 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 Invesco Euro

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

The idea behind INTUITIVE SURGICAL and Invesco Euro Corporate 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.