Correlation Between INTUITIVE SURGICAL and S A P

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

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

Diversification Opportunities for INTUITIVE SURGICAL and S A P

0.7

Correlation Coefficient

INTUITIVE SURGICAL  S A P

Poor diversification

The 3 months correlation between INTUITIVE and SAP is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding INTUITIVE SURGICAL and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE has no effect on the direction of INTUITIVE SURGICAL i.e., INTUITIVE SURGICAL and S A P go up and down completely randomly.

Pair Corralation between INTUITIVE SURGICAL and S A P

Assuming the 90 days trading horizon INTUITIVE SURGICAL is expected to generate 2.09 times less return on investment than S A P. But when comparing it to its historical volatility, INTUITIVE SURGICAL is 1.15 times less risky than S A P. It trades about 0.1 of its potential returns per unit of risk. SAP SE is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  21,654  in SAP SE on April 21, 2025 and sell it today you would earn a total of  4,751  from holding SAP SE or generate 21.94% return on investment over 90 days.

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

INTUITIVE SURGICAL  vs.  SAP SE

INTUITIVE SURGICAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INTUITIVE SURGICAL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, INTUITIVE SURGICAL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SAP SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, S A P unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTUITIVE SURGICAL and S A P

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

The idea behind INTUITIVE SURGICAL and SAP 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.