Correlation Between Postal Realty and Intuitive Surgical

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

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

Diversification Opportunities for Postal Realty and Intuitive Surgical

-0.61

Correlation Coefficient

Postal Realty  Intuitive Surgical

Excellent diversification

The 3 months correlation between Postal and Intuitive is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Postal Realty 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 Postal Realty Trust 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 Postal Realty i.e., Postal Realty and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Postal Realty and Intuitive Surgical

Given the investment horizon of 90 days Postal Realty Trust is expected to generate 0.7 times more return on investment than Intuitive Surgical. However, Postal Realty Trust is 1.43 times less risky than Intuitive Surgical. It trades about 0.04 of its potential returns per unit of risk. Intuitive Surgical is currently generating about -0.04 per unit of risk. If you would invest  1,239  in Postal Realty Trust on January 10, 2025 and sell it today you would earn a total of  47.00  from holding Postal Realty Trust or generate 3.79% return on investment over 90 days.

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

Postal Realty Trust  vs.  Intuitive Surgical

Postal Realty Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Realty Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Postal Realty is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Postal Realty and Intuitive Surgical

The main advantage of trading using opposite Postal Realty and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty 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 Postal Realty Trust 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.