Correlation Between Intuitive Machines and ML Capital

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

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

Diversification Opportunities for Intuitive Machines and ML Capital

-0.82

Correlation Coefficient

Intuitive Machines  ML Capital

Pay attention - limited upside

The 3 months correlation between Intuitive and MLCG is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and ML Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ML Capital Group 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 ML Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ML Capital Group has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and ML Capital go up and down completely randomly.

Pair Corralation between Intuitive Machines and ML Capital

Given the investment horizon of 90 days Intuitive Machines is expected to generate 1.42 times more return on investment than ML Capital. However, Intuitive Machines is 1.42 times more volatile than ML Capital Group. It trades about 0.17 of its potential returns per unit of risk. ML Capital Group is currently generating about -0.12 per unit of risk. If you would invest  572.00  in Intuitive Machines on September 14, 2024 and sell it today you would earn a total of  608.00  from holding Intuitive Machines or generate 106.29% return on investment over 90 days.

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

Intuitive Machines  vs.  ML Capital Group

Intuitive Machines

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 13 (%) 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.

ML Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Intuitive Machines and ML Capital

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

The idea behind Intuitive Machines and ML Capital Group 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.