Correlation Between Intuitive Surgical and Teladoc
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Teladoc 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 Teladoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Teladoc, you can compare the effects of market volatilities on Intuitive Surgical and Teladoc 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 Teladoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Teladoc.
Diversification Opportunities for Intuitive Surgical and Teladoc
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intuitive and Teladoc is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc 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 Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Teladoc go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Teladoc
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 5.26 times less return on investment than Teladoc. But when comparing it to its historical volatility, Intuitive Surgical is 4.83 times less risky than Teladoc. It trades about 0.12 of its potential returns per unit of risk. Teladoc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 968.00 in Teladoc on November 27, 2024 and sell it today you would earn a total of 141.00 from holding Teladoc or generate 14.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Surgical vs. Teladoc
Performance |
| Timeline |
| Intuitive Surgical |
| Teladoc |
Intuitive Surgical and Teladoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Teladoc
The main advantage of trading using opposite Intuitive Surgical and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Teladoc 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 Teladoc will offset losses from the drop in Teladoc's long position.| Intuitive Surgical vs. BioNTech SE | Intuitive Surgical vs. Agilent Technologies | Intuitive Surgical vs. NXP Semiconductors NV | Intuitive Surgical vs. Lattice Semiconductor |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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