Correlation Between LOral SA and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both LOral SA and INTUITIVE SURGICAL 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 LOral SA and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOral SA and INTUITIVE SURGICAL, you can compare the effects of market volatilities on LOral SA and INTUITIVE SURGICAL 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 LOral SA with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOral SA and INTUITIVE SURGICAL.
Diversification Opportunities for LOral SA and INTUITIVE SURGICAL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LOral and INTUITIVE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding LOral SA and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and LOral SA 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 LOral SA are associated (or correlated) with INTUITIVE SURGICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTUITIVE SURGICAL has no effect on the direction of LOral SA i.e., LOral SA and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between LOral SA and INTUITIVE SURGICAL
Assuming the 90 days horizon LOral SA is expected to generate 1.45 times less return on investment than INTUITIVE SURGICAL. But when comparing it to its historical volatility, LOral SA is 1.44 times less risky than INTUITIVE SURGICAL. It trades about 0.19 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 50,360 in INTUITIVE SURGICAL on November 1, 2024 and sell it today you would earn a total of 4,410 from holding INTUITIVE SURGICAL or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
LOral SA vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| LOral SA |
| INTUITIVE SURGICAL |
LOral SA and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOral SA and INTUITIVE SURGICAL
The main advantage of trading using opposite LOral SA and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOral SA position performs unexpectedly, INTUITIVE SURGICAL 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 INTUITIVE SURGICAL will offset losses from the drop in INTUITIVE SURGICAL's long position.| LOral SA vs. Colgate Palmolive | LOral SA vs. Superior Plus Corp | LOral SA vs. Origin Agritech | LOral SA vs. Identiv |
| INTUITIVE SURGICAL vs. TAL Education Group | INTUITIVE SURGICAL vs. Fevertree Drinks PLC | INTUITIVE SURGICAL vs. THAI BEVERAGE | INTUITIVE SURGICAL vs. American Public Education |
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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