Correlation Between Guardant Health and Intuitive Surgical

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

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

Diversification Opportunities for Guardant Health and Intuitive Surgical

-0.47

Correlation Coefficient

Guardant Health  Intuitive Surgical

Very good diversification

The 3 months correlation between Guardant and Intuitive is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Guardant Health 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 Guardant Health 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 Guardant Health i.e., Guardant Health and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Guardant Health and Intuitive Surgical

Allowing for the 90-day total investment horizon Guardant Health is expected to under-perform the Intuitive Surgical. In addition to that, Guardant Health is 1.9 times more volatile than Intuitive Surgical. It trades about -0.06 of its total potential returns per unit of risk. Intuitive Surgical is currently generating about -0.04 per unit of volatility. If you would invest  51,718  in Intuitive Surgical on May 1, 2025 and sell it today you would lose (2,031) from holding Intuitive Surgical or give up 3.93% of portfolio value over 90 days.

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

Guardant Health  vs.  Intuitive Surgical

Guardant Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guardant Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Intuitive Surgical

Risk-Adjusted Performance

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Guardant Health and Intuitive Surgical

The main advantage of trading using opposite Guardant Health and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health 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 Guardant Health 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.