Correlation Between Richter Gedeon and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both Richter Gedeon 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 Richter Gedeon and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richter Gedeon Vegyszeti and INTUITIVE SURGICAL, you can compare the effects of market volatilities on Richter Gedeon 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 Richter Gedeon with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richter Gedeon and INTUITIVE SURGICAL.
Diversification Opportunities for Richter Gedeon and INTUITIVE SURGICAL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Richter and INTUITIVE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Richter Gedeon Vegyszeti and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Richter Gedeon 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 Richter Gedeon Vegyszeti 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 Richter Gedeon i.e., Richter Gedeon and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between Richter Gedeon and INTUITIVE SURGICAL
Assuming the 90 days trading horizon Richter Gedeon is expected to generate 2.49 times less return on investment than INTUITIVE SURGICAL. In addition to that, Richter Gedeon is 1.11 times more volatile than INTUITIVE SURGICAL. It trades about 0.03 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.08 per unit of volatility. If you would invest 25,855 in INTUITIVE SURGICAL on September 3, 2024 and sell it today you would earn a total of 25,345 from holding INTUITIVE SURGICAL or generate 98.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richter Gedeon Vegyszeti vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| Richter Gedeon Vegyszeti |
| INTUITIVE SURGICAL |
Richter Gedeon and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richter Gedeon and INTUITIVE SURGICAL
The main advantage of trading using opposite Richter Gedeon and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richter Gedeon 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.The idea behind Richter Gedeon Vegyszeti and INTUITIVE SURGICAL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| INTUITIVE SURGICAL vs. MICRONIC MYDATA | INTUITIVE SURGICAL vs. DATANG INTL POW | INTUITIVE SURGICAL vs. Nordic Semiconductor ASA | INTUITIVE SURGICAL vs. ON SEMICONDUCTOR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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