Correlation Between INTUITIVE SURGICAL and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both INTUITIVE SURGICAL and Fresenius Medical 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 Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTUITIVE SURGICAL and Fresenius Medical Care, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Fresenius Medical.
Diversification Opportunities for INTUITIVE SURGICAL and Fresenius Medical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTUITIVE and Fresenius is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Fresenius Medical go up and down completely randomly.
Pair Corralation between INTUITIVE SURGICAL and Fresenius Medical
Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 1.26 times more return on investment than Fresenius Medical. However, INTUITIVE SURGICAL is 1.26 times more volatile than Fresenius Medical Care. It trades about 0.15 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.15 per unit of risk. If you would invest 51,050 in INTUITIVE SURGICAL on October 31, 2024 and sell it today you would earn a total of 3,720 from holding INTUITIVE SURGICAL or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTUITIVE SURGICAL vs. Fresenius Medical Care
Performance |
| Timeline |
| INTUITIVE SURGICAL |
| Fresenius Medical Care |
INTUITIVE SURGICAL and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTUITIVE SURGICAL and Fresenius Medical
The main advantage of trading using opposite INTUITIVE SURGICAL and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTUITIVE SURGICAL position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| INTUITIVE SURGICAL vs. Westinghouse Air Brake | INTUITIVE SURGICAL vs. Phibro Animal Health | INTUITIVE SURGICAL vs. Siemens Healthineers AG | INTUITIVE SURGICAL vs. RYANAIR HLDGS ADR |
| Fresenius Medical vs. Chemed | Fresenius Medical vs. Superior Plus Corp | Fresenius Medical vs. Origin Agritech | Fresenius Medical vs. Identiv |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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