Correlation Between Option Care and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both Option Care 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 Option Care and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Option Care Health and INTUITIVE SURGICAL, you can compare the effects of market volatilities on Option Care 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 Option Care with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Option Care and INTUITIVE SURGICAL.
Diversification Opportunities for Option Care and INTUITIVE SURGICAL
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Option and INTUITIVE is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Option Care Health and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Option Care 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 Option Care Health 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 Option Care i.e., Option Care and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between Option Care and INTUITIVE SURGICAL
Assuming the 90 days trading horizon Option Care Health is expected to under-perform the INTUITIVE SURGICAL. In addition to that, Option Care is 2.06 times more volatile than INTUITIVE SURGICAL. It trades about -0.1 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.23 per unit of volatility. If you would invest 42,730 in INTUITIVE SURGICAL on August 30, 2024 and sell it today you would earn a total of 8,740 from holding INTUITIVE SURGICAL or generate 20.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Option Care Health vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| Option Care Health |
| INTUITIVE SURGICAL |
Option Care and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Option Care and INTUITIVE SURGICAL
The main advantage of trading using opposite Option Care and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Option Care 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.| Option Care vs. CarsalesCom | Option Care vs. PACIFIC ONLINE | Option Care vs. Silicon Motion Technology | Option Care vs. NISSAN CHEMICAL IND |
| INTUITIVE SURGICAL vs. INFORMATION SVC GRP | INTUITIVE SURGICAL vs. Fidelity National Information | INTUITIVE SURGICAL vs. DATANG INTL POW | INTUITIVE SURGICAL vs. DICKER DATA LTD |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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