Correlation Between SHOPRITE HDGS and INTUITIVE SURGICAL

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

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

Diversification Opportunities for SHOPRITE HDGS and INTUITIVE SURGICAL

0.71

Correlation Coefficient

SHOPRITE HDGS  INTUITIVE SURGICAL

Poor diversification

The 3 months correlation between SHOPRITE and INTUITIVE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SHOPRITE HDGS ADR and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL and SHOPRITE HDGS 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 SHOPRITE HDGS ADR 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 SHOPRITE HDGS i.e., SHOPRITE HDGS and INTUITIVE SURGICAL go up and down completely randomly.

Pair Corralation between SHOPRITE HDGS and INTUITIVE SURGICAL

Assuming the 90 days trading horizon SHOPRITE HDGS is expected to generate 45.18 times less return on investment than INTUITIVE SURGICAL. In addition to that, SHOPRITE HDGS is 1.5 times more volatile than INTUITIVE SURGICAL. It trades about 0.0 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.05 per unit of volatility. If you would invest  42,620  in INTUITIVE SURGICAL on April 24, 2025 and sell it today you would earn a total of  1,780  from holding INTUITIVE SURGICAL or generate 4.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

SHOPRITE HDGS ADR  vs.  INTUITIVE SURGICAL

SHOPRITE HDGS ADR

Risk-Adjusted Performance

Very Weak

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

INTUITIVE SURGICAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, INTUITIVE SURGICAL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SHOPRITE HDGS and INTUITIVE SURGICAL

The main advantage of trading using opposite SHOPRITE HDGS and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHOPRITE HDGS 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 SHOPRITE HDGS ADR 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.