Correlation Between Somnigroup International and Intuitive Surgical

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

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

Diversification Opportunities for Somnigroup International and Intuitive Surgical

-0.49

Correlation Coefficient

Somnigroup International  Intuitive Surgical

Very good diversification

The 3 months correlation between Somnigroup and Intuitive is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Somnigroup International and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Somnigroup International 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 Somnigroup International 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 Somnigroup International i.e., Somnigroup International and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Somnigroup International and Intuitive Surgical

Considering the 90-day investment horizon Somnigroup International is expected to generate 1.15 times more return on investment than Intuitive Surgical. However, Somnigroup International is 1.15 times more volatile than Intuitive Surgical. It trades about 0.19 of its potential returns per unit of risk. Intuitive Surgical is currently generating about -0.04 per unit of risk. If you would invest  6,120  in Somnigroup International on May 1, 2025 and sell it today you would earn a total of  1,210  from holding Somnigroup International or generate 19.77% return on investment over 90 days.

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

Somnigroup International  vs.  Intuitive Surgical

Somnigroup International

Risk-Adjusted Performance

Good

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

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 Somnigroup International and Intuitive Surgical

The main advantage of trading using opposite Somnigroup International and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somnigroup International 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 Somnigroup International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.