Correlation Between Intuitive Machines and Advantest

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

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

Diversification Opportunities for Intuitive Machines and Advantest

0.59

Correlation Coefficient

Intuitive Machines  Advantest

Very weak diversification

The 3 months correlation between Intuitive and Advantest is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Advantest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest 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 Advantest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Advantest go up and down completely randomly.

Pair Corralation between Intuitive Machines and Advantest

Given the investment horizon of 90 days Intuitive Machines is expected to under-perform the Advantest. In addition to that, Intuitive Machines is 1.94 times more volatile than Advantest. It trades about -0.11 of its total potential returns per unit of risk. Advantest is currently generating about -0.08 per unit of volatility. If you would invest  6,250  in Advantest on December 30, 2024 and sell it today you would lose (1,703) from holding Advantest or give up 27.25% of portfolio value over 90 days.

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

Intuitive Machines  vs.  Advantest

Intuitive Machines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Advantest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advantest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Intuitive Machines and Advantest

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

The idea behind Intuitive Machines and Advantest 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.