Correlation Between Intuitive Machines and PVA TePla

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

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

Diversification Opportunities for Intuitive Machines and PVA TePla

-0.66

Correlation Coefficient

Intuitive Machines  PVA TePla

Excellent diversification

The 3 months correlation between Intuitive and PVA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and PVA TePla AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVA TePla AG 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 PVA TePla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVA TePla AG has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and PVA TePla go up and down completely randomly.

Pair Corralation between Intuitive Machines and PVA TePla

Given the investment horizon of 90 days Intuitive Machines is expected to generate 2.24 times more return on investment than PVA TePla. However, Intuitive Machines is 2.24 times more volatile than PVA TePla AG. It trades about 0.15 of its potential returns per unit of risk. PVA TePla AG is currently generating about -0.04 per unit of risk. If you would invest  799.00  in Intuitive Machines on September 25, 2024 and sell it today you would earn a total of  558.00  from holding Intuitive Machines or generate 69.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Intuitive Machines  vs.  PVA TePla AG

Intuitive Machines

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 12 (%) 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.

PVA TePla AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PVA TePla AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Intuitive Machines and PVA TePla

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

The idea behind Intuitive Machines and PVA TePla AG 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.