Correlation Between Universal Display and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both Universal Display 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 Universal Display and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and INTUITIVE SURGICAL, you can compare the effects of market volatilities on Universal Display 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 Universal Display with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and INTUITIVE SURGICAL.
Diversification Opportunities for Universal Display and INTUITIVE SURGICAL
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and INTUITIVE is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Universal Display 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 Universal Display 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 Universal Display i.e., Universal Display and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between Universal Display and INTUITIVE SURGICAL
Assuming the 90 days horizon Universal Display is expected to generate 6.61 times less return on investment than INTUITIVE SURGICAL. In addition to that, Universal Display is 1.58 times more volatile than INTUITIVE SURGICAL. It trades about 0.01 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.14 per unit of volatility. If you would invest 27,865 in INTUITIVE SURGICAL on September 14, 2024 and sell it today you would earn a total of 23,455 from holding INTUITIVE SURGICAL or generate 84.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| Universal Display |
| INTUITIVE SURGICAL |
Universal Display and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and INTUITIVE SURGICAL
The main advantage of trading using opposite Universal Display and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display 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.| Universal Display vs. Applied Materials | Universal Display vs. Tokyo Electron Limited | Universal Display vs. Superior Plus Corp | Universal Display vs. SIVERS SEMICONDUCTORS AB |
| INTUITIVE SURGICAL vs. JD SPORTS FASH | INTUITIVE SURGICAL vs. Universal Display | INTUITIVE SURGICAL vs. EIDESVIK OFFSHORE NK | INTUITIVE SURGICAL vs. GLG LIFE TECH |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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