Correlation Between INTUITIVE SURGICAL and Commerzbank

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

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

Diversification Opportunities for INTUITIVE SURGICAL and Commerzbank

-0.8

Correlation Coefficient

INTUITIVE SURGICAL  Commerzbank

Pay attention - limited upside

The 3 months correlation between INTUITIVE and Commerzbank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG 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 Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Commerzbank go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Commerzbank

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 0.87 times more return on investment than Commerzbank. However, INTUITIVE SURGICAL is 1.16 times less risky than Commerzbank. It trades about 0.19 of its potential returns per unit of risk. Commerzbank AG is currently generating about -0.05 per unit of risk. If you would invest  42,790  in INTUITIVE SURGICAL on October 8, 2024 and sell it today you would earn a total of  9,110  from holding INTUITIVE SURGICAL or generate 21.29% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  Commerzbank AG

INTUITIVE SURGICAL

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 15 (%) 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.

Commerzbank AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commerzbank AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with INTUITIVE SURGICAL and Commerzbank

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

The idea behind INTUITIVE SURGICAL and Commerzbank AG 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 Anywhere module to track or share privately all of your investments from the convenience of any device.