Correlation Between Intuitive Investments and SM Energy

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

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

Diversification Opportunities for Intuitive Investments and SM Energy

0.49

Correlation Coefficient

Intuitive Investments  SM Energy

Very weak diversification

The 3 months correlation between Intuitive and 0KZA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and SM Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Energy and Intuitive Investments 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 Investments Group are associated (or correlated) with SM Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Energy has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and SM Energy go up and down completely randomly.

Pair Corralation between Intuitive Investments and SM Energy

Assuming the 90 days trading horizon Intuitive Investments Group is expected to generate 1.0 times more return on investment than SM Energy. However, Intuitive Investments is 1.0 times more volatile than SM Energy Co. It trades about -0.02 of its potential returns per unit of risk. SM Energy Co is currently generating about -0.2 per unit of risk. If you would invest  12,450  in Intuitive Investments Group on December 2, 2024 and sell it today you would lose (650.00) from holding Intuitive Investments Group or give up 5.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Intuitive Investments Group  vs.  SM Energy Co

Intuitive Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SM Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days SM Energy Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Intuitive Investments and SM Energy

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

The idea behind Intuitive Investments Group and SM Energy Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.