Correlation Between Intuitive Machines and Guangzhou

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

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

Diversification Opportunities for Intuitive Machines and Guangzhou

0.66

Correlation Coefficient

Intuitive Machines  Guangzhou

Poor diversification

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

Pair Corralation between Intuitive Machines and Guangzhou

Given the investment horizon of 90 days Intuitive Machines is expected to generate 2.17 times more return on investment than Guangzhou. However, Intuitive Machines is 2.17 times more volatile than Guangzhou RF Properties. It trades about 0.05 of its potential returns per unit of risk. Guangzhou RF Properties is currently generating about 0.04 per unit of risk. If you would invest  1,000.00  in Intuitive Machines on September 21, 2024 and sell it today you would earn a total of  278.00  from holding Intuitive Machines or generate 27.8% return on investment over 90 days.

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

Intuitive Machines  vs.  Guangzhou RF Properties

Intuitive Machines

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 10 (%) 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.

Guangzhou RF Properties

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou RF Properties are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Guangzhou reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Machines and Guangzhou

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

The idea behind Intuitive Machines and Guangzhou RF Properties 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.