Correlation Between Groupama Entreprises and INTUITIVE SURGICAL

Can any of the company-specific risk be diversified away by investing in both Groupama Entreprises 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 Groupama Entreprises and INTUITIVE SURGICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Groupama Entreprises N and INTUITIVE SURGICAL, you can compare the effects of market volatilities on Groupama Entreprises 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 Groupama Entreprises with a short position of INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupama Entreprises and INTUITIVE SURGICAL.

Diversification Opportunities for Groupama Entreprises and INTUITIVE SURGICAL

0.92

Correlation Coefficient

Groupama Entreprises  INTUITIVE SURGICAL

Almost no diversification

The 3 months correlation between Groupama and INTUITIVE is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Groupama Entreprises N and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and Groupama Entreprises 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 Groupama Entreprises N 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 Groupama Entreprises i.e., Groupama Entreprises and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between Groupama Entreprises and INTUITIVE SURGICAL

Assuming the 90 days trading horizon Groupama Entreprises is expected to generate 17.42 times less return on investment than INTUITIVE SURGICAL. But when comparing it to its historical volatility, Groupama Entreprises N is 137.35 times less risky than INTUITIVE SURGICAL. It trades about 0.99 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  44,535  in INTUITIVE SURGICAL on September 12, 2024 and sell it today you would earn a total of  6,335  from holding INTUITIVE SURGICAL or generate 14.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Groupama Entreprises N  vs.  INTUITIVE SURGICAL

Groupama Entreprises

Risk-Adjusted Performance

78 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 78 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

INTUITIVE SURGICAL

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, INTUITIVE SURGICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Groupama Entreprises and INTUITIVE SURGICAL

The main advantage of trading using opposite Groupama Entreprises and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupama Entreprises 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 Groupama Entreprises N 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.