Correlation Between Intuitive Machines and Shimano

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

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

Diversification Opportunities for Intuitive Machines and Shimano

-0.7

Correlation Coefficient

Intuitive Machines  Shimano

Excellent diversification

The 3 months correlation between Intuitive and Shimano is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Shimano go up and down completely randomly.

Pair Corralation between Intuitive Machines and Shimano

Given the investment horizon of 90 days Intuitive Machines is expected to under-perform the Shimano. In addition to that, Intuitive Machines is 5.14 times more volatile than Shimano Inc ADR. It trades about -0.11 of its total potential returns per unit of risk. Shimano Inc ADR is currently generating about 0.04 per unit of volatility. If you would invest  1,360  in Shimano Inc ADR on December 29, 2024 and sell it today you would earn a total of  54.00  from holding Shimano Inc ADR or generate 3.97% return on investment over 90 days.

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

Intuitive Machines  vs.  Shimano Inc ADR

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.

Shimano Inc ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shimano Inc ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Shimano is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intuitive Machines and Shimano

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

The idea behind Intuitive Machines and Shimano Inc ADR 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.