Correlation Between Intuitive Surgical and Somnigroup International

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

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

Diversification Opportunities for Intuitive Surgical and Somnigroup International

-0.34

Correlation Coefficient

Intuitive Surgical  Somnigroup International

Very good diversification

The 3 months correlation between Intuitive and Somnigroup is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Somnigroup International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somnigroup International 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 Somnigroup International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somnigroup International has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Somnigroup International go up and down completely randomly.

Pair Corralation between Intuitive Surgical and Somnigroup International

Given the investment horizon of 90 days Intuitive Surgical is expected to under-perform the Somnigroup International. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Surgical is 1.16 times less risky than Somnigroup International. The stock trades about -0.04 of its potential returns per unit of risk. The Somnigroup International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  6,120  in Somnigroup International on May 1, 2025 and sell it today you would earn a total of  1,157  from holding Somnigroup International or generate 18.91% return on investment over 90 days.

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

Intuitive Surgical  vs.  Somnigroup International

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.

Somnigroup International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Somnigroup International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, Somnigroup International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Surgical and Somnigroup International

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

The idea behind Intuitive Surgical and Somnigroup International 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.