Correlation Between Intuitive Surgical and Metalink
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Metalink 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 Metalink into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Metalink, you can compare the effects of market volatilities on Intuitive Surgical and Metalink 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 Metalink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Metalink.
Diversification Opportunities for Intuitive Surgical and Metalink
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intuitive and Metalink is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Metalink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalink 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 Metalink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalink has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Metalink go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Metalink
Given the investment horizon of 90 days Intuitive Surgical is expected to generate 4.24 times more return on investment than Metalink. However, Intuitive Surgical is 4.24 times more volatile than Metalink. It trades about 0.23 of its potential returns per unit of risk. Metalink is currently generating about -0.22 per unit of risk. If you would invest 53,188 in Intuitive Surgical on November 8, 2024 and sell it today you would earn a total of 5,662 from holding Intuitive Surgical or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Intuitive Surgical vs. Metalink
Performance |
| Timeline |
| Intuitive Surgical |
| Metalink |
Intuitive Surgical and Metalink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Metalink
The main advantage of trading using opposite Intuitive Surgical and Metalink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Metalink 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 Metalink will offset losses from the drop in Metalink's long position.| Intuitive Surgical vs. Repligen | Intuitive Surgical vs. ResMed Inc | Intuitive Surgical vs. Merit Medical Systems | Intuitive Surgical vs. ICU Medical |
| Metalink vs. Catalyst Pharmaceuticals | Metalink vs. Lindblad Expeditions Holdings | Metalink vs. Xponential Fitness | Metalink vs. Definitive Healthcare Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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