Correlation Between Intuitive Machines and Western Sierra

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

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

Diversification Opportunities for Intuitive Machines and Western Sierra

-0.66

Correlation Coefficient

Intuitive Machines  Western Sierra

Excellent diversification

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

Pair Corralation between Intuitive Machines and Western Sierra

Assuming the 90 days horizon Intuitive Machines is expected to generate 8.86 times more return on investment than Western Sierra. However, Intuitive Machines is 8.86 times more volatile than Western Sierra Mining. It trades about 0.25 of its potential returns per unit of risk. Western Sierra Mining is currently generating about -0.17 per unit of risk. If you would invest  137.00  in Intuitive Machines on August 30, 2024 and sell it today you would earn a total of  443.00  from holding Intuitive Machines or generate 323.36% 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.  Western Sierra Mining

Intuitive Machines

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Intuitive Machines showed solid returns over the last few months and may actually be approaching a breakup point.

Western Sierra Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Sierra Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Intuitive Machines and Western Sierra

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

The idea behind Intuitive Machines and Western Sierra Mining 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.