Correlation Between Intuitive Surgical and Merck
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and Merck 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 Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Merck Company, you can compare the effects of market volatilities on Intuitive Surgical and Merck 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 Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Merck.
Diversification Opportunities for Intuitive Surgical and Merck
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intuitive and Merck is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company 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 Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and Merck go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Merck
Given the investment horizon of 90 days Intuitive Surgical is expected to generate 1.14 times less return on investment than Merck. In addition to that, Intuitive Surgical is 1.14 times more volatile than Merck Company. It trades about 0.19 of its total potential returns per unit of risk. Merck Company is currently generating about 0.25 per unit of volatility. If you would invest 7,789 in Merck Company on September 26, 2025 and sell it today you would earn a total of 2,856 from holding Merck Company or generate 36.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Surgical vs. Merck Company
Performance |
| Timeline |
| Intuitive Surgical |
| Merck Company |
Intuitive Surgical and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Merck
The main advantage of trading using opposite Intuitive Surgical and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.| Intuitive Surgical vs. Repligen | Intuitive Surgical vs. ResMed Inc | Intuitive Surgical vs. Merit Medical Systems | Intuitive Surgical vs. ICU Medical |
| Merck vs. Novo Nordisk AS | Merck vs. Novartis AG ADR | Merck vs. Abbott Laboratories | Merck vs. Gilead Sciences |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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