Correlation Between Netflix and Intuitive Surgical
Can any of the company-specific risk be diversified away by investing in both Netflix 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 Netflix and Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Intuitive Surgical, you can compare the effects of market volatilities on Netflix 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 Netflix with a short position of Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Intuitive Surgical.
Diversification Opportunities for Netflix and Intuitive Surgical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Netflix and Intuitive is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Netflix 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 Netflix 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 Netflix i.e., Netflix and Intuitive Surgical go up and down completely randomly.
Pair Corralation between Netflix and Intuitive Surgical
Assuming the 90 days trading horizon Netflix is expected to generate 1.09 times more return on investment than Intuitive Surgical. However, Netflix is 1.09 times more volatile than Intuitive Surgical. It trades about 0.19 of its potential returns per unit of risk. Intuitive Surgical is currently generating about 0.19 per unit of risk. If you would invest 4,651 in Netflix on August 26, 2024 and sell it today you would earn a total of 5,814 from holding Netflix or generate 125.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Intuitive Surgical
Performance |
| Timeline |
| Netflix |
| Intuitive Surgical |
Netflix and Intuitive Surgical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Intuitive Surgical
The main advantage of trading using opposite Netflix and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix 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.| Netflix vs. Energisa SA | Netflix vs. BTG Pactual Logstica | Netflix vs. Plano Plano Desenvolvimento | Netflix vs. Companhia Habitasul de |
| Intuitive Surgical vs. Baxter International | Intuitive Surgical vs. Fleury SA | Intuitive Surgical vs. Baumer SA | Intuitive Surgical vs. Baumer SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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