Correlation Between Intuitive Machines and Santen Pharmaceutical

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

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

Diversification Opportunities for Intuitive Machines and Santen Pharmaceutical

-0.69

Correlation Coefficient

Intuitive Machines  Santen Pharmaceutical

Excellent diversification

The 3 months correlation between Intuitive and Santen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Santen Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santen Pharmaceutical 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 Santen Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santen Pharmaceutical has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Santen Pharmaceutical go up and down completely randomly.

Pair Corralation between Intuitive Machines and Santen Pharmaceutical

Given the investment horizon of 90 days Intuitive Machines is expected to generate 5.43 times more return on investment than Santen Pharmaceutical. However, Intuitive Machines is 5.43 times more volatile than Santen Pharmaceutical Co. It trades about 0.46 of its potential returns per unit of risk. Santen Pharmaceutical Co is currently generating about -0.22 per unit of risk. If you would invest  1,242  in Intuitive Machines on October 7, 2024 and sell it today you would earn a total of  947.00  from holding Intuitive Machines or generate 76.25% 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.  Santen Pharmaceutical Co

Intuitive Machines

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Intuitive Machines reported solid returns over the last few months and may actually be approaching a breakup point.

Santen Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santen Pharmaceutical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Santen Pharmaceutical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Intuitive Machines and Santen Pharmaceutical

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

The idea behind Intuitive Machines and Santen Pharmaceutical Co 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.