Correlation Between Intuitive Machines and 79North

Can any of the company-specific risk be diversified away by investing in both Intuitive Machines and 79North 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 79North into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intuitive Machines and 79North, you can compare the effects of market volatilities on Intuitive Machines and 79North 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 79North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Machines and 79North.

Diversification Opportunities for Intuitive Machines and 79North

0.65

Correlation Coefficient

Intuitive Machines  79North

Poor diversification

The 3 months correlation between Intuitive and 79North is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and 79North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 79North 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 79North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 79North has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and 79North go up and down completely randomly.

Pair Corralation between Intuitive Machines and 79North

Given the investment horizon of 90 days Intuitive Machines is expected to generate 9.03 times less return on investment than 79North. But when comparing it to its historical volatility, Intuitive Machines is 11.32 times less risky than 79North. It trades about 0.1 of its potential returns per unit of risk. 79North is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.08  in 79North on October 22, 2024 and sell it today you would earn a total of  2.78  from holding 79North or generate 3475.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	72.37%
Values	Daily Returns

Intuitive Machines  vs.  79North

Intuitive Machines

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 15 (%) 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.

79North

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 79North has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, 79North 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 79North

The main advantage of trading using opposite Intuitive Machines and 79North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Machines position performs unexpectedly, 79North 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 79North will offset losses from the drop in 79North's long position.

The idea behind Intuitive Machines and 79North 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.