Correlation Between GLG LIFE and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both GLG LIFE 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 GLG LIFE and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and INTUITIVE SURGICAL, you can compare the effects of market volatilities on GLG LIFE 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 GLG LIFE with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and INTUITIVE SURGICAL.
Diversification Opportunities for GLG LIFE and INTUITIVE SURGICAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and INTUITIVE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and GLG LIFE 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 GLG LIFE TECH 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 GLG LIFE i.e., GLG LIFE and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between GLG LIFE and INTUITIVE SURGICAL
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 38.05 times more return on investment than INTUITIVE SURGICAL. However, GLG LIFE is 38.05 times more volatile than INTUITIVE SURGICAL. It trades about 0.07 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.14 per unit of risk. If you would invest 1.30 in GLG LIFE TECH on September 14, 2024 and sell it today you would earn a total of 0.70 from holding GLG LIFE TECH or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLG LIFE TECH vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| GLG LIFE TECH |
| INTUITIVE SURGICAL |
GLG LIFE and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and INTUITIVE SURGICAL
The main advantage of trading using opposite GLG LIFE and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE 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 GLG LIFE TECH 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.| INTUITIVE SURGICAL vs. JD SPORTS FASH | INTUITIVE SURGICAL vs. Universal Display | INTUITIVE SURGICAL vs. EIDESVIK OFFSHORE NK | INTUITIVE SURGICAL vs. GLG LIFE TECH |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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