Correlation Between INTUITIVE SURGICAL and Xtrackers LevDAX
Can any of the company-specific risk be diversified away by investing in both INTUITIVE SURGICAL and Xtrackers LevDAX 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 Xtrackers LevDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTUITIVE SURGICAL and Xtrackers LevDAX, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Xtrackers LevDAX 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 Xtrackers LevDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Xtrackers LevDAX.
Diversification Opportunities for INTUITIVE SURGICAL and Xtrackers LevDAX
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INTUITIVE and Xtrackers is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Xtrackers LevDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers LevDAX 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 Xtrackers LevDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers LevDAX has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Xtrackers LevDAX go up and down completely randomly.
Pair Corralation between INTUITIVE SURGICAL and Xtrackers LevDAX
Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 1.25 times less return on investment than Xtrackers LevDAX. But when comparing it to its historical volatility, INTUITIVE SURGICAL is 1.04 times less risky than Xtrackers LevDAX. It trades about 0.13 of its potential returns per unit of risk. Xtrackers LevDAX is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 17,726 in Xtrackers LevDAX on September 12, 2024 and sell it today you would earn a total of 3,204 from holding Xtrackers LevDAX or generate 18.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTUITIVE SURGICAL vs. Xtrackers LevDAX
Performance |
| Timeline |
| INTUITIVE SURGICAL |
| Xtrackers LevDAX |
INTUITIVE SURGICAL and Xtrackers LevDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTUITIVE SURGICAL and Xtrackers LevDAX
The main advantage of trading using opposite INTUITIVE SURGICAL and Xtrackers LevDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTUITIVE SURGICAL position performs unexpectedly, Xtrackers LevDAX 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 Xtrackers LevDAX will offset losses from the drop in Xtrackers LevDAX's long position.| INTUITIVE SURGICAL vs. Apple Inc | INTUITIVE SURGICAL vs. Apple Inc | INTUITIVE SURGICAL vs. Apple Inc | INTUITIVE SURGICAL vs. Apple Inc |
| Xtrackers LevDAX vs. UBS Fund Solutions | Xtrackers LevDAX vs. Xtrackers II | Xtrackers LevDAX vs. Xtrackers Nikkei 225 | Xtrackers LevDAX vs. iShares VII PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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