Correlation Between Intuitive Surgical and Baumer SA

Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Baumer SA 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 Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intuitive Surgical and Baumer SA, you can compare the effects of market volatilities on Intuitive Surgical and Baumer SA 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 Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Baumer SA.

Diversification Opportunities for Intuitive Surgical and Baumer SA

-0.3

Correlation Coefficient

Intuitive Surgical  Baumer SA

Very good diversification

The 3 months correlation between Intuitive and Baumer is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA 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 Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Baumer SA go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Baumer SA

Assuming the 90 days trading horizon Intuitive Surgical is expected to generate 0.42 times more return on investment than Baumer SA. However, Intuitive Surgical is 2.39 times less risky than Baumer SA. It trades about 0.18 of its potential returns per unit of risk. Baumer SA is currently generating about 0.04 per unit of risk. If you would invest  13,403  in Intuitive Surgical on September 5, 2024 and sell it today you would earn a total of  2,949  from holding Intuitive Surgical or generate 22.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Intuitive Surgical  vs.  Baumer SA

Intuitive Surgical

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Surgical are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intuitive Surgical sustained solid returns over the last few months and may actually be approaching a breakup point.

Baumer SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baumer SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Baumer SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intuitive Surgical and Baumer SA

The main advantage of trading using opposite Intuitive Surgical and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Baumer SA 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 Baumer SA will offset losses from the drop in Baumer SA's long position.

The idea behind Intuitive Surgical and Baumer SA 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.

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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.