Correlation Between Intuitive Machines and Golden Agri-Resources

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

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

Diversification Opportunities for Intuitive Machines and Golden Agri-Resources

0.38

Correlation Coefficient

Intuitive Machines  Golden Agri-Resources

Weak diversification

The 3 months correlation between Intuitive and Golden is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources 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 Golden Agri-Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Golden Agri-Resources go up and down completely randomly.

Pair Corralation between Intuitive Machines and Golden Agri-Resources

Given the investment horizon of 90 days Intuitive Machines is expected to under-perform the Golden Agri-Resources. In addition to that, Intuitive Machines is 3.78 times more volatile than Golden Agri Resources. It trades about -0.11 of its total potential returns per unit of risk. Golden Agri Resources is currently generating about -0.01 per unit of volatility. If you would invest  2,080  in Golden Agri Resources on December 29, 2024 and sell it today you would lose (81.00) from holding Golden Agri Resources or give up 3.89% of portfolio value over 90 days.

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

Intuitive Machines  vs.  Golden Agri Resources

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.

Golden Agri Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Agri Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Golden Agri-Resources is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intuitive Machines and Golden Agri-Resources

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

The idea behind Intuitive Machines and Golden Agri Resources 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.