Correlation Between NN Group and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both NN Group 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 NN Group and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and INTUITIVE SURGICAL, you can compare the effects of market volatilities on NN Group 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 NN Group with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and INTUITIVE SURGICAL.
Diversification Opportunities for NN Group and INTUITIVE SURGICAL
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 2NN and INTUITIVE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and NN Group 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 NN Group NV 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 NN Group i.e., NN Group and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between NN Group and INTUITIVE SURGICAL
Assuming the 90 days horizon NN Group NV is expected to under-perform the INTUITIVE SURGICAL. But the stock apears to be less risky and, when comparing its historical volatility, NN Group NV is 1.56 times less risky than INTUITIVE SURGICAL. The stock trades about -0.12 of its potential returns per unit of risk. The INTUITIVE SURGICAL is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 47,005 in INTUITIVE SURGICAL on September 1, 2024 and sell it today you would earn a total of 4,195 from holding INTUITIVE SURGICAL or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Group NV vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| NN Group NV |
| INTUITIVE SURGICAL |
NN Group and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and INTUITIVE SURGICAL
The main advantage of trading using opposite NN Group and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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.| NN Group vs. AIR PRODCHEMICALS | NN Group vs. Mitsubishi Gas Chemical | NN Group vs. NISSAN CHEMICAL IND | NN Group vs. MagnaChip Semiconductor Corp |
| INTUITIVE SURGICAL vs. Gold Road Resources | INTUITIVE SURGICAL vs. Gaztransport Technigaz SA | INTUITIVE SURGICAL vs. COPLAND ROAD CAPITAL | INTUITIVE SURGICAL vs. Singapore Airlines Limited |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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