Correlation Between Intuitive Machines and Eve Holding

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

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

Diversification Opportunities for Intuitive Machines and Eve Holding

0.6

Correlation Coefficient

Intuitive Machines  Eve Holding

Poor diversification

The 3 months correlation between Intuitive and Eve is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding 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 Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Eve Holding go up and down completely randomly.

Pair Corralation between Intuitive Machines and Eve Holding

Given the investment horizon of 90 days Intuitive Machines is expected to generate 2.15 times more return on investment than Eve Holding. However, Intuitive Machines is 2.15 times more volatile than Eve Holding. It trades about 0.24 of its potential returns per unit of risk. Eve Holding is currently generating about 0.17 per unit of risk. If you would invest  497.00  in Intuitive Machines on August 30, 2024 and sell it today you would earn a total of  948.00  from holding Intuitive Machines or generate 190.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Intuitive Machines  vs.  Eve Holding

Intuitive Machines

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Intuitive Machines reported solid returns over the last few months and may actually be approaching a breakup point.

Eve Holding

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eve Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Eve Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Machines and Eve Holding

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

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