Correlation Between INTUITIVE SURGICAL and Option Care
Can any of the company-specific risk be diversified away by investing in both INTUITIVE SURGICAL and Option Care 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 Option Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTUITIVE SURGICAL and Option Care Health, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Option Care 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 Option Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Option Care.
Diversification Opportunities for INTUITIVE SURGICAL and Option Care
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INTUITIVE and Option is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Option Care Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Option Care Health 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 Option Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Option Care Health has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Option Care go up and down completely randomly.
Pair Corralation between INTUITIVE SURGICAL and Option Care
Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 0.49 times more return on investment than Option Care. However, INTUITIVE SURGICAL is 2.06 times less risky than Option Care. It trades about 0.23 of its potential returns per unit of risk. Option Care Health is currently generating about -0.1 per unit of risk. If you would invest 42,730 in INTUITIVE SURGICAL on August 30, 2024 and sell it today you would earn a total of 8,740 from holding INTUITIVE SURGICAL or generate 20.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTUITIVE SURGICAL vs. Option Care Health
Performance |
| Timeline |
| INTUITIVE SURGICAL |
| Option Care Health |
INTUITIVE SURGICAL and Option Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTUITIVE SURGICAL and Option Care
The main advantage of trading using opposite INTUITIVE SURGICAL and Option Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTUITIVE SURGICAL position performs unexpectedly, Option Care 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 Option Care will offset losses from the drop in Option Care's long position.| INTUITIVE SURGICAL vs. INFORMATION SVC GRP | INTUITIVE SURGICAL vs. Fidelity National Information | INTUITIVE SURGICAL vs. DATANG INTL POW | INTUITIVE SURGICAL vs. DICKER DATA LTD |
| Option Care vs. CarsalesCom | Option Care vs. PACIFIC ONLINE | Option Care vs. Silicon Motion Technology | Option Care vs. NISSAN CHEMICAL IND |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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