Correlation Between Momentus and Intuitive Machines

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

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

Diversification Opportunities for Momentus and Intuitive Machines

-0.23

Correlation Coefficient

Momentus  Intuitive Machines

Very good diversification

The 3 months correlation between Momentus and Intuitive is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and Momentus 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 Momentus are associated (or correlated) with Intuitive Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Machines has no effect on the direction of Momentus i.e., Momentus and Intuitive Machines go up and down completely randomly.

Pair Corralation between Momentus and Intuitive Machines

Given the investment horizon of 90 days Momentus is expected to under-perform the Intuitive Machines. In addition to that, Momentus is 1.36 times more volatile than Intuitive Machines. It trades about -0.13 of its total potential returns per unit of risk. Intuitive Machines is currently generating about 0.02 per unit of volatility. If you would invest  1,635  in Intuitive Machines on November 28, 2024 and sell it today you would lose (95.00) from holding Intuitive Machines or give up 5.81% of portfolio value over 90 days.

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

Momentus  vs.  Intuitive Machines

Momentus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Momentus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Intuitive Machines

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Intuitive Machines may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Momentus and Intuitive Machines

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

The idea behind Momentus and Intuitive Machines 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.