Correlation Between INTUITIVE SURGICAL and Suzano SA

Can any of the company-specific risk be diversified away by investing in both INTUITIVE SURGICAL and Suzano 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 Suzano 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 Suzano SA, you can compare the effects of market volatilities on INTUITIVE SURGICAL and Suzano 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 Suzano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTUITIVE SURGICAL and Suzano SA.

Diversification Opportunities for INTUITIVE SURGICAL and Suzano SA

0.86

Correlation Coefficient

INTUITIVE SURGICAL  Suzano SA

Very poor diversification

The 3 months correlation between INTUITIVE and Suzano is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and Suzano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano 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 Suzano SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzano SA has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and Suzano SA go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and Suzano SA

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 0.98 times more return on investment than Suzano SA. However, INTUITIVE SURGICAL is 1.02 times less risky than Suzano SA. It trades about 0.16 of its potential returns per unit of risk. Suzano SA is currently generating about 0.14 per unit of risk. If you would invest  43,445  in INTUITIVE SURGICAL on September 19, 2024 and sell it today you would earn a total of  7,795  from holding INTUITIVE SURGICAL or generate 17.94% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  Suzano SA

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.

Suzano SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Suzano SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Suzano SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTUITIVE SURGICAL and Suzano SA

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

The idea behind INTUITIVE SURGICAL and Suzano 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.