Correlation Between Intuitive Surgical and Guardant Health

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

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

Diversification Opportunities for Intuitive Surgical and Guardant Health

-0.48

Correlation Coefficient

Intuitive Surgical  Guardant Health

Very good diversification

The 3 months correlation between Intuitive and Guardant is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health 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 Guardant Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardant Health has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Guardant Health go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Guardant Health

Given the investment horizon of 90 days Intuitive Surgical is expected to under-perform the Guardant Health. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Surgical is 2.58 times less risky than Guardant Health. The stock trades about -0.18 of its potential returns per unit of risk. The Guardant Health is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  4,024  in Guardant Health on May 19, 2025 and sell it today you would earn a total of  1,864  from holding Guardant Health or generate 46.32% return on investment over 90 days.

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

Intuitive Surgical  vs.  Guardant Health

Intuitive Surgical

Risk-Adjusted Performance

Weakest

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

Guardant Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Guardant Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Surgical and Guardant Health

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

The idea behind Intuitive Surgical and Guardant Health 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..