Correlation Between Intuitive Surgical and American Eagle
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and American Eagle 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 American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and American Eagle Outfitters, you can compare the effects of market volatilities on Intuitive Surgical and American Eagle 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 American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and American Eagle.
Diversification Opportunities for Intuitive Surgical and American Eagle
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intuitive and American is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and American Eagle Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Outfitters 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 American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Outfitters has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and American Eagle go up and down completely randomly.
Pair Corralation between Intuitive Surgical and American Eagle
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 0.66 times more return on investment than American Eagle. However, Intuitive Surgical is 1.52 times less risky than American Eagle. It trades about 0.15 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.02 per unit of risk. If you would invest 43,610 in Intuitive Surgical on November 2, 2024 and sell it today you would earn a total of 12,600 from holding Intuitive Surgical or generate 28.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Intuitive Surgical vs. American Eagle Outfitters
Performance |
| Timeline |
| Intuitive Surgical |
| American Eagle Outfitters |
Intuitive Surgical and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and American Eagle
The main advantage of trading using opposite Intuitive Surgical and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| Intuitive Surgical vs. ALBIS LEASING AG | Intuitive Surgical vs. PREMIER FOODS | Intuitive Surgical vs. CAL MAINE FOODS | Intuitive Surgical vs. Lifeway Foods |
| American Eagle vs. Autohome ADR | American Eagle vs. HOME DEPOT | American Eagle vs. UMC Electronics Co | American Eagle vs. STMICROELECTRONICS |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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