Correlation Between SIFCO Industries and Intuitive Machines

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

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

Diversification Opportunities for SIFCO Industries and Intuitive Machines

-0.56

Correlation Coefficient

SIFCO Industries  Intuitive Machines

Excellent diversification

The 3 months correlation between SIFCO and Intuitive is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding SIFCO Industries and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and SIFCO Industries 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 SIFCO Industries 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 SIFCO Industries i.e., SIFCO Industries and Intuitive Machines go up and down completely randomly.

Pair Corralation between SIFCO Industries and Intuitive Machines

Considering the 90-day investment horizon SIFCO Industries is expected to under-perform the Intuitive Machines. But the stock apears to be less risky and, when comparing its historical volatility, SIFCO Industries is 3.09 times less risky than Intuitive Machines. The stock trades about -0.12 of its potential returns per unit of risk. The Intuitive Machines is currently generating about 0.25 of returns per unit of risk over similar time horizon. 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	Very Weak
Accuracy	98.44%
Values	Daily Returns

SIFCO Industries  vs.  Intuitive Machines

SIFCO Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIFCO Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with SIFCO Industries and Intuitive Machines

The main advantage of trading using opposite SIFCO Industries and Intuitive Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIFCO Industries 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 SIFCO Industries 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.