Correlation Between Intuitive Machines and Solar Alliance

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

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

Diversification Opportunities for Intuitive Machines and Solar Alliance

-0.86

Correlation Coefficient

Intuitive Machines  Solar Alliance

Pay attention - limited upside

The 3 months correlation between Intuitive and Solar is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy 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 Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Solar Alliance go up and down completely randomly.

Pair Corralation between Intuitive Machines and Solar Alliance

Given the investment horizon of 90 days Intuitive Machines is expected to generate 1.16 times more return on investment than Solar Alliance. However, Intuitive Machines is 1.16 times more volatile than Solar Alliance Energy. It trades about 0.18 of its potential returns per unit of risk. Solar Alliance Energy is currently generating about -0.04 per unit of risk. If you would invest  540.00  in Intuitive Machines on September 17, 2024 and sell it today you would earn a total of  629.00  from holding Intuitive Machines or generate 116.48% 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.  Solar Alliance Energy

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.

Solar Alliance Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solar Alliance Energy 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 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 Solar Alliance

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

The idea behind Intuitive Machines and Solar Alliance Energy 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.