Correlation Between Femasys and Intuitive Surgical

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

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

Diversification Opportunities for Femasys and Intuitive Surgical

0.43

Correlation Coefficient

Femasys  Intuitive Surgical

Very weak diversification

The 3 months correlation between Femasys and Intuitive is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Femasys and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Femasys 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 Femasys 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 Femasys i.e., Femasys and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Femasys and Intuitive Surgical

Given the investment horizon of 90 days Femasys is expected to under-perform the Intuitive Surgical. In addition to that, Femasys is 2.71 times more volatile than Intuitive Surgical. It trades about -0.36 of its total potential returns per unit of risk. Intuitive Surgical is currently generating about -0.21 per unit of volatility. If you would invest  39,487  in Intuitive Surgical on February 1, 2024 and sell it today you would lose (2,425) from holding Intuitive Surgical or give up 6.14% of portfolio value over 90 days.

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

Femasys  vs.  Intuitive Surgical

Femasys

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Femasys showed solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Surgical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Femasys and Intuitive Surgical

The main advantage of trading using opposite Femasys and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Femasys 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 Femasys 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.