Correlation Between Baxter International and Intuitive Surgical
Can any of the company-specific risk be diversified away by investing in both Baxter International 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 Baxter International and Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baxter International and Intuitive Surgical, you can compare the effects of market volatilities on Baxter International 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 Baxter International with a short position of Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baxter International and Intuitive Surgical.
Diversification Opportunities for Baxter International and Intuitive Surgical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baxter and Intuitive is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Baxter International 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 Baxter International 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 Baxter International i.e., Baxter International and Intuitive Surgical go up and down completely randomly.
Pair Corralation between Baxter International and Intuitive Surgical
Considering the 90-day investment horizon Baxter International is expected to under-perform the Intuitive Surgical. But the stock apears to be less risky and, when comparing its historical volatility, Baxter International is 1.14 times less risky than Intuitive Surgical. The stock trades about -0.07 of its potential returns per unit of risk. The Intuitive Surgical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 37,764 in Intuitive Surgical on January 19, 2024 and sell it today you would lose (501.00) from holding Intuitive Surgical or give up 1.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Baxter International vs. Intuitive Surgical
Performance |
Timeline |
Baxter International |
Intuitive Surgical |
Baxter International and Intuitive Surgical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baxter International and Intuitive Surgical
The main advantage of trading using opposite Baxter International and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baxter International 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.Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies |
Intuitive Surgical vs. Repligen | Intuitive Surgical vs. ResMed Inc | Intuitive Surgical vs. Merit Medical Systems | Intuitive Surgical vs. ICU Medical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |