Correlation Between 50247VAC3 and Intuitive Surgical

Can any of the company-specific risk be diversified away by investing in both 50247VAC3 and Intuitive Surgical 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 50247VAC3 and Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTL FIN and Intuitive Surgical, you can compare the effects of market volatilities on 50247VAC3 and Intuitive Surgical 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 50247VAC3 with a short position of Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50247VAC3 and Intuitive Surgical.

Diversification Opportunities for 50247VAC3 and Intuitive Surgical

-0.6

Correlation Coefficient

50247VAC3  Intuitive Surgical

Excellent diversification

The 3 months correlation between 50247VAC3 and Intuitive is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTL FIN and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and 50247VAC3 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 LYB INTL FIN are associated (or correlated) with Intuitive Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Surgical has no effect on the direction of 50247VAC3 i.e., 50247VAC3 and Intuitive Surgical go up and down completely randomly.

Pair Corralation between 50247VAC3 and Intuitive Surgical

Assuming the 90 days trading horizon LYB INTL FIN is expected to under-perform the Intuitive Surgical. In addition to that, 50247VAC3 is 1.04 times more volatile than Intuitive Surgical. It trades about -0.01 of its total potential returns per unit of risk. Intuitive Surgical is currently generating about 0.03 per unit of volatility. If you would invest  53,886  in Intuitive Surgical on October 9, 2024 and sell it today you would earn a total of  351.00  from holding Intuitive Surgical or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.47%
Values	Daily Returns

LYB INTL FIN  vs.  Intuitive Surgical

LYB INTL FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTL FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50247VAC3 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Intuitive Surgical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Surgical are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Intuitive Surgical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 50247VAC3 and Intuitive Surgical

The main advantage of trading using opposite 50247VAC3 and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50247VAC3 position performs unexpectedly, Intuitive Surgical 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 Intuitive Surgical will offset losses from the drop in Intuitive Surgical's long position.

The idea behind LYB INTL FIN and Intuitive Surgical 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.