Correlation Between PENN NATL and Intuitive Surgical
Can any of the company-specific risk be diversified away by investing in both PENN NATL 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 PENN NATL and Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and Intuitive Surgical, you can compare the effects of market volatilities on PENN NATL 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 PENN NATL with a short position of Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Intuitive Surgical.
Diversification Opportunities for PENN NATL and Intuitive Surgical
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and Intuitive is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and PENN NATL 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 PENN NATL GAMING 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 PENN NATL i.e., PENN NATL and Intuitive Surgical go up and down completely randomly.
Pair Corralation between PENN NATL and Intuitive Surgical
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 1.13 times more return on investment than Intuitive Surgical. However, PENN NATL is 1.13 times more volatile than Intuitive Surgical. It trades about 0.28 of its potential returns per unit of risk. Intuitive Surgical is currently generating about 0.03 per unit of risk. If you would invest 1,890 in PENN NATL GAMING on November 22, 2024 and sell it today you would earn a total of 219.00 from holding PENN NATL GAMING or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Intuitive Surgical
Performance |
| Timeline |
| PENN NATL GAMING |
| Intuitive Surgical |
PENN NATL and Intuitive Surgical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Intuitive Surgical
The main advantage of trading using opposite PENN NATL and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL 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.| PENN NATL vs. CarsalesCom | PENN NATL vs. Magnachip Semiconductor | PENN NATL vs. JD SPORTS FASH | PENN NATL vs. GUILD ESPORTS PLC |
| Intuitive Surgical vs. ESSILORLUXOTTICA 12ON | Intuitive Surgical vs. Becton Dickinson and | Intuitive Surgical vs. HOYA Corporation | Intuitive Surgical vs. Resmed Inc DRC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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