Correlation Between INTUITIVE SURGICAL and National Fuel

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

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

Diversification Opportunities for INTUITIVE SURGICAL and National Fuel

0.09

Correlation Coefficient

INTUITIVE SURGICAL  National Fuel

Significant diversification

The 3 months correlation between INTUITIVE and National is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and National Fuel Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Fuel Gas 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 National Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Fuel Gas has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and National Fuel go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and National Fuel

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to under-perform the National Fuel. In addition to that, INTUITIVE SURGICAL is 1.37 times more volatile than National Fuel Gas. It trades about -0.08 of its total potential returns per unit of risk. National Fuel Gas is currently generating about 0.24 per unit of volatility. If you would invest  5,700  in National Fuel Gas on December 24, 2024 and sell it today you would earn a total of  1,500  from holding National Fuel Gas or generate 26.32% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  National Fuel Gas

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.

National Fuel Gas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Fuel Gas are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, National Fuel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTUITIVE SURGICAL and National Fuel

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

The idea behind INTUITIVE SURGICAL and National Fuel Gas 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.