Correlation Between INTUITIVE SURGICAL and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both INTUITIVE SURGICAL and Neste Oyj 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 Neste Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTUITIVE SURGICAL and Neste Oyj, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Neste Oyj 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 Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Neste Oyj.
Diversification Opportunities for INTUITIVE SURGICAL and Neste Oyj
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INTUITIVE and Neste is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj 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 Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Neste Oyj go up and down completely randomly.
Pair Corralation between INTUITIVE SURGICAL and Neste Oyj
Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 0.59 times more return on investment than Neste Oyj. However, INTUITIVE SURGICAL is 1.68 times less risky than Neste Oyj. It trades about 0.11 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.08 per unit of risk. If you would invest 36,730 in INTUITIVE SURGICAL on September 1, 2024 and sell it today you would earn a total of 14,470 from holding INTUITIVE SURGICAL or generate 39.4% 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. Neste Oyj
Performance |
| Timeline |
| INTUITIVE SURGICAL |
| Neste Oyj |
INTUITIVE SURGICAL and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTUITIVE SURGICAL and Neste Oyj
The main advantage of trading using opposite INTUITIVE SURGICAL and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTUITIVE SURGICAL position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| INTUITIVE SURGICAL vs. Gold Road Resources | INTUITIVE SURGICAL vs. Gaztransport Technigaz SA | INTUITIVE SURGICAL vs. COPLAND ROAD CAPITAL | INTUITIVE SURGICAL vs. Singapore Airlines Limited |
| Neste Oyj vs. Astral Foods Limited | Neste Oyj vs. Tyson Foods | Neste Oyj vs. Lifeway Foods | Neste Oyj vs. UNIVERSAL MUSIC GROUP |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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