Correlation Between INTUITIVE SURGICAL and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both INTUITIVE SURGICAL and Cognizant Technology 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 Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTUITIVE SURGICAL and Cognizant Technology Solutions, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Cognizant Technology 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 Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Cognizant Technology.
Diversification Opportunities for INTUITIVE SURGICAL and Cognizant Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INTUITIVE and Cognizant is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology 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 Cognizant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognizant Technology has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Cognizant Technology go up and down completely randomly.
Pair Corralation between INTUITIVE SURGICAL and Cognizant Technology
Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 1.05 times more return on investment than Cognizant Technology. However, INTUITIVE SURGICAL is 1.05 times more volatile than Cognizant Technology Solutions. It trades about 0.18 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.1 per unit of risk. If you would invest 43,190 in INTUITIVE SURGICAL on August 28, 2024 and sell it today you would earn a total of 9,160 from holding INTUITIVE SURGICAL or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTUITIVE SURGICAL vs. Cognizant Technology Solutions
Performance |
| Timeline |
| INTUITIVE SURGICAL |
| Cognizant Technology |
INTUITIVE SURGICAL and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTUITIVE SURGICAL and Cognizant Technology
The main advantage of trading using opposite INTUITIVE SURGICAL and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTUITIVE SURGICAL position performs unexpectedly, Cognizant Technology 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 Cognizant Technology will offset losses from the drop in Cognizant Technology's long position.| INTUITIVE SURGICAL vs. Wizz Air Holdings | INTUITIVE SURGICAL vs. ALTAIR RES INC | INTUITIVE SURGICAL vs. WIZZ AIR HLDGUNSPADR4 | INTUITIVE SURGICAL vs. DIVERSIFIED ROYALTY |
| Cognizant Technology vs. ATRESMEDIA | Cognizant Technology vs. SEI INVESTMENTS | Cognizant Technology vs. REGAL ASIAN INVESTMENTS | Cognizant Technology vs. ANTA SPORTS PRODUCT |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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