Correlation Between Intuitive Surgical and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Concurrent Technologies 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 Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Concurrent Technologies Plc, you can compare the effects of market volatilities on Intuitive Surgical and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Concurrent Technologies.
Diversification Opportunities for Intuitive Surgical and Concurrent Technologies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intuitive and Concurrent is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Concurrent Technologies
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 1.47 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Intuitive Surgical is 1.52 times less risky than Concurrent Technologies. It trades about 0.12 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,954 in Concurrent Technologies Plc on September 13, 2024 and sell it today you would earn a total of 3,796 from holding Concurrent Technologies Plc or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.45% |
| Values | Daily Returns |
Intuitive Surgical vs. Concurrent Technologies Plc
Performance |
| Timeline |
| Intuitive Surgical |
| Concurrent Technologies |
Intuitive Surgical and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Concurrent Technologies
The main advantage of trading using opposite Intuitive Surgical and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| Intuitive Surgical vs. Samsung Electronics Co | Intuitive Surgical vs. Samsung Electronics Co | Intuitive Surgical vs. Hyundai Motor | Intuitive Surgical vs. Reliance Industries Ltd |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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