Correlation Between Intuitive Surgical and Becton Dickinson
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Becton Dickinson 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 Becton Dickinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Becton Dickinson and, you can compare the effects of market volatilities on Intuitive Surgical and Becton Dickinson 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 Becton Dickinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Becton Dickinson.
Diversification Opportunities for Intuitive Surgical and Becton Dickinson
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intuitive and Becton is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Becton Dickinson and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson 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 Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Becton Dickinson go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Becton Dickinson
Given the investment horizon of 90 days Intuitive Surgical is expected to generate 0.77 times more return on investment than Becton Dickinson. However, Intuitive Surgical is 1.3 times less risky than Becton Dickinson. It trades about 0.2 of its potential returns per unit of risk. Becton Dickinson and is currently generating about -0.17 per unit of risk. If you would invest 51,088 in Intuitive Surgical on August 28, 2024 and sell it today you would earn a total of 2,567 from holding Intuitive Surgical or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Surgical vs. Becton Dickinson and
Performance |
| Timeline |
| Intuitive Surgical |
| Becton Dickinson |
Intuitive Surgical and Becton Dickinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Becton Dickinson
The main advantage of trading using opposite Intuitive Surgical and Becton Dickinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Becton Dickinson 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 Becton Dickinson will offset losses from the drop in Becton Dickinson's long position.| Intuitive Surgical vs. Repligen | Intuitive Surgical vs. ResMed Inc | Intuitive Surgical vs. Merit Medical Systems | Intuitive Surgical vs. ICU Medical |
| Becton Dickinson vs. Heartbeam | Becton Dickinson vs. EUDA Health Holdings | Becton Dickinson vs. Nutex Health | Becton Dickinson vs. Healthcare Triangle |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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