Correlation Between INTUITIVE SURGICAL and TotalEnergies

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

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

Diversification Opportunities for INTUITIVE SURGICAL and TotalEnergies

-0.86

Correlation Coefficient

INTUITIVE SURGICAL  TotalEnergies

Pay attention - limited upside

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

Pair Corralation between INTUITIVE SURGICAL and TotalEnergies

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 1.19 times more return on investment than TotalEnergies. However, INTUITIVE SURGICAL is 1.19 times more volatile than TotalEnergies SE. It trades about 0.14 of its potential returns per unit of risk. TotalEnergies SE is currently generating about -0.14 per unit of risk. If you would invest  44,415  in INTUITIVE SURGICAL on September 17, 2024 and sell it today you would earn a total of  7,385  from holding INTUITIVE SURGICAL or generate 16.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

INTUITIVE SURGICAL  vs.  TotalEnergies SE

INTUITIVE SURGICAL

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, INTUITIVE SURGICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with INTUITIVE SURGICAL and TotalEnergies

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

The idea behind INTUITIVE SURGICAL and TotalEnergies SE 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.