Correlation Between Intuitive Surgical and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and LG Electronics 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 LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and LG Electronics, you can compare the effects of market volatilities on Intuitive Surgical and LG Electronics 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and LG Electronics.
Diversification Opportunities for Intuitive Surgical and LG Electronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intuitive and LGLG is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and LG Electronics go up and down completely randomly.
Pair Corralation between Intuitive Surgical and LG Electronics
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 0.7 times more return on investment than LG Electronics. However, Intuitive Surgical is 1.42 times less risky than LG Electronics. It trades about 0.15 of its potential returns per unit of risk. LG Electronics is currently generating about -0.05 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. LG Electronics
Performance |
| Timeline |
| Intuitive Surgical |
| LG Electronics |
Intuitive Surgical and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and LG Electronics
The main advantage of trading using opposite Intuitive Surgical and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| Intuitive Surgical vs. ALBIS LEASING AG | Intuitive Surgical vs. PREMIER FOODS | Intuitive Surgical vs. CAL MAINE FOODS | Intuitive Surgical vs. Lifeway Foods |
| LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Samsung Electronics Co | LG Electronics vs. Sony Group Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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