Correlation Between CHINA HUARONG and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and INTUITIVE SURGICAL, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and INTUITIVE SURGICAL.
Diversification Opportunities for CHINA HUARONG and INTUITIVE SURGICAL
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and INTUITIVE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between CHINA HUARONG and INTUITIVE SURGICAL
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to under-perform the INTUITIVE SURGICAL. In addition to that, CHINA HUARONG is 3.64 times more volatile than INTUITIVE SURGICAL. It trades about -0.22 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.39 per unit of volatility. If you would invest 47,325 in INTUITIVE SURGICAL on August 27, 2024 and sell it today you would earn a total of 6,055 from holding INTUITIVE SURGICAL or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| INTUITIVE SURGICAL |
CHINA HUARONG and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and INTUITIVE SURGICAL
The main advantage of trading using opposite CHINA HUARONG and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.| CHINA HUARONG vs. EOG Resources | CHINA HUARONG vs. Canadian Natural Resources | CHINA HUARONG vs. Woodside Energy Group |
| INTUITIVE SURGICAL vs. PENN NATL GAMING | INTUITIVE SURGICAL vs. GAMING FAC SA | INTUITIVE SURGICAL vs. Xinhua Winshare Publishing | INTUITIVE SURGICAL vs. TSOGO SUN GAMING |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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