Correlation Between Intuitive Surgical and Lesico
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Lesico 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 Intuitive Surgical and Lesico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Lesico, you can compare the effects of market volatilities on Intuitive Surgical and Lesico 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 Intuitive Surgical with a short position of Lesico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Lesico.
Diversification Opportunities for Intuitive Surgical and Lesico
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intuitive and Lesico is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico and Intuitive Surgical 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 Intuitive Surgical are associated (or correlated) with Lesico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesico has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Lesico go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Lesico
Given the investment horizon of 90 days Intuitive Surgical is expected to under-perform the Lesico. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Surgical is 1.72 times less risky than Lesico. The stock trades about -0.08 of its potential returns per unit of risk. The Lesico is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 30,810 in Lesico on January 24, 2024 and sell it today you would earn a total of 2,400 from holding Lesico or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Intuitive Surgical vs. Lesico
Performance |
| Timeline |
| Intuitive Surgical |
| Lesico |
Intuitive Surgical and Lesico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Lesico
The main advantage of trading using opposite Intuitive Surgical and Lesico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Lesico 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 Lesico will offset losses from the drop in Lesico's long position.| Intuitive Surgical vs. HealthStream | Intuitive Surgical vs. National Research Corp | Intuitive Surgical vs. HealthEquity | Intuitive Surgical vs. Health Catalyst |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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