Correlation Between Intuitive Surgical and CrowdStrike Holdings
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and CrowdStrike Holdings 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 CrowdStrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and CrowdStrike Holdings, you can compare the effects of market volatilities on Intuitive Surgical and CrowdStrike Holdings 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 CrowdStrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and CrowdStrike Holdings.
Diversification Opportunities for Intuitive Surgical and CrowdStrike Holdings
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intuitive and CrowdStrike is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and CrowdStrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrowdStrike Holdings 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 CrowdStrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrowdStrike Holdings has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and CrowdStrike Holdings go up and down completely randomly.
Pair Corralation between Intuitive Surgical and CrowdStrike Holdings
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 0.53 times more return on investment than CrowdStrike Holdings. However, Intuitive Surgical is 1.9 times less risky than CrowdStrike Holdings. It trades about 0.14 of its potential returns per unit of risk. CrowdStrike Holdings is currently generating about 0.05 per unit of risk. If you would invest 33,910 in Intuitive Surgical on October 20, 2024 and sell it today you would earn a total of 23,800 from holding Intuitive Surgical or generate 70.19% 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. CrowdStrike Holdings
Performance |
| Timeline |
| Intuitive Surgical |
| CrowdStrike Holdings |
Intuitive Surgical and CrowdStrike Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and CrowdStrike Holdings
The main advantage of trading using opposite Intuitive Surgical and CrowdStrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, CrowdStrike Holdings 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 CrowdStrike Holdings will offset losses from the drop in CrowdStrike Holdings' long position.| Intuitive Surgical vs. DAIDO METAL TD | Intuitive Surgical vs. Lery Seafood Group | Intuitive Surgical vs. TYSON FOODS A | Intuitive Surgical vs. Yuexiu Transport Infrastructure |
| CrowdStrike Holdings vs. BII Railway Transportation | CrowdStrike Holdings vs. Stag Industrial | CrowdStrike Holdings vs. TRAINLINE PLC LS | CrowdStrike Holdings vs. Perseus Mining Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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