Correlation Between Intuitive Surgical and Fras Le
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Fras Le 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 Fras Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Fras le SA, you can compare the effects of market volatilities on Intuitive Surgical and Fras Le 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 Fras Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Fras Le.
Diversification Opportunities for Intuitive Surgical and Fras Le
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Intuitive and Fras is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Fras le SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fras le SA 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 Fras Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fras le SA has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Fras Le go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Fras Le
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 1.15 times more return on investment than Fras Le. However, Intuitive Surgical is 1.15 times more volatile than Fras le SA. It trades about 0.19 of its potential returns per unit of risk. Fras le SA is currently generating about 0.08 per unit of risk. If you would invest 7,778 in Intuitive Surgical on September 4, 2024 and sell it today you would earn a total of 8,574 from holding Intuitive Surgical or generate 110.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Surgical vs. Fras le SA
Performance |
| Timeline |
| Intuitive Surgical |
| Fras le SA |
Intuitive Surgical and Fras Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Fras Le
The main advantage of trading using opposite Intuitive Surgical and Fras Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Fras Le 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 Fras Le will offset losses from the drop in Fras Le's long position.The idea behind Intuitive Surgical and Fras le SA 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.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |