Correlation Between Intuitive Machines and A2 Milk

Can any of the company-specific risk be diversified away by investing in both Intuitive Machines and A2 Milk 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 Machines and A2 Milk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intuitive Machines and The a2 Milk, you can compare the effects of market volatilities on Intuitive Machines and A2 Milk 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 Machines with a short position of A2 Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Machines and A2 Milk.

Diversification Opportunities for Intuitive Machines and A2 Milk

-0.66

Correlation Coefficient

Intuitive Machines  A2 Milk

Excellent diversification

The 3 months correlation between Intuitive and ACOPF is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and The a2 Milk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on a2 Milk and Intuitive Machines 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 Machines are associated (or correlated) with A2 Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of a2 Milk has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and A2 Milk go up and down completely randomly.

Pair Corralation between Intuitive Machines and A2 Milk

Given the investment horizon of 90 days Intuitive Machines is expected to generate 1.3 times more return on investment than A2 Milk. However, Intuitive Machines is 1.3 times more volatile than The a2 Milk. It trades about 0.12 of its potential returns per unit of risk. The a2 Milk is currently generating about 0.03 per unit of risk. If you would invest  928.00  in Intuitive Machines on September 19, 2024 and sell it today you would earn a total of  461.00  from holding Intuitive Machines or generate 49.68% return on investment over 90 days.

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

Intuitive Machines  vs.  The a2 Milk

Intuitive Machines

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 9 (%) 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.

a2 Milk

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The a2 Milk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, A2 Milk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intuitive Machines and A2 Milk

The main advantage of trading using opposite Intuitive Machines and A2 Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Machines position performs unexpectedly, A2 Milk 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 A2 Milk will offset losses from the drop in A2 Milk's long position.

The idea behind Intuitive Machines and The a2 Milk 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.