Correlation Between Golden Agri and Intuitive Machines

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

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

Diversification Opportunities for Golden Agri and Intuitive Machines

-0.15

Correlation Coefficient

Golden Agri  Intuitive Machines

Good diversification

The 3 months correlation between Golden and Intuitive is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and Golden Agri 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 Golden Agri Resources are associated (or correlated) with Intuitive Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Machines has no effect on the direction of Golden Agri i.e., Golden Agri and Intuitive Machines go up and down completely randomly.

Pair Corralation between Golden Agri and Intuitive Machines

Assuming the 90 days horizon Golden Agri is expected to generate 51.51 times less return on investment than Intuitive Machines. But when comparing it to its historical volatility, Golden Agri Resources is 8.1 times less risky than Intuitive Machines. It trades about 0.03 of its potential returns per unit of risk. Intuitive Machines is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  572.00  in Intuitive Machines on September 14, 2024 and sell it today you would earn a total of  594.00  from holding Intuitive Machines or generate 103.85% return on investment over 90 days.

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

Golden Agri Resources  vs.  Intuitive Machines

Golden Agri Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Agri Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Golden Agri is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intuitive Machines

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Intuitive Machines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Agri and Intuitive Machines

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

The idea behind Golden Agri Resources and Intuitive Machines 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.