Correlation Between INTUITIVE SURGICAL and Glatfelter

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

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

Diversification Opportunities for INTUITIVE SURGICAL and Glatfelter

0.43

Correlation Coefficient

INTUITIVE SURGICAL  Glatfelter

Very weak diversification

The 3 months correlation between INTUITIVE and Glatfelter is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Glatfelter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glatfelter 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 Glatfelter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glatfelter has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Glatfelter go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Glatfelter

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 0.26 times more return on investment than Glatfelter. However, INTUITIVE SURGICAL is 3.8 times less risky than Glatfelter. It trades about 0.15 of its potential returns per unit of risk. Glatfelter is currently generating about 0.03 per unit of risk. If you would invest  26,135  in INTUITIVE SURGICAL on September 19, 2024 and sell it today you would earn a total of  25,575  from holding INTUITIVE SURGICAL or generate 97.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.66%
Values	Daily Returns

INTUITIVE SURGICAL  vs.  Glatfelter

INTUITIVE SURGICAL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 12 (%) 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.

Glatfelter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glatfelter has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Glatfelter is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INTUITIVE SURGICAL and Glatfelter

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

The idea behind INTUITIVE SURGICAL and Glatfelter 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.