Correlation Between Intuitive Surgical and Square
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Square 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 Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Square Inc, you can compare the effects of market volatilities on Intuitive Surgical and Square 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 Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Square.
Diversification Opportunities for Intuitive Surgical and Square
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Intuitive and Square is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Square Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Square Inc 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 Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Square Inc has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Square go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Square
Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 0.53 times more return on investment than Square. However, Intuitive Surgical is 1.88 times less risky than Square. It trades about 0.09 of its potential returns per unit of risk. Square Inc is currently generating about 0.04 per unit of risk. If you would invest 25,675 in Intuitive Surgical on August 29, 2024 and sell it today you would earn a total of 26,015 from holding Intuitive Surgical or generate 101.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Surgical vs. Square Inc
Performance |
| Timeline |
| Intuitive Surgical |
| Square Inc |
Intuitive Surgical and Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Square
The main advantage of trading using opposite Intuitive Surgical and Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Square 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 Square will offset losses from the drop in Square's long position.| Intuitive Surgical vs. GameStop Corp | Intuitive Surgical vs. Corsair Gaming | Intuitive Surgical vs. FORWARD AIR P | Intuitive Surgical vs. PENN NATL GAMING |
| Square vs. Shopify | Square vs. BYD Company Limited | Square vs. PayPal Holdings | Square vs. Palantir Technologies |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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