Correlation Between Spirit Aerosystems and Intuitive Machines

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

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

Diversification Opportunities for Spirit Aerosystems and Intuitive Machines

-0.18

Correlation Coefficient

Spirit Aerosystems  Intuitive Machines

Good diversification

The 3 months correlation between Spirit and Intuitive is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Aerosystems Holdings and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and Spirit Aerosystems 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 Spirit Aerosystems Holdings 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 Spirit Aerosystems i.e., Spirit Aerosystems and Intuitive Machines go up and down completely randomly.

Pair Corralation between Spirit Aerosystems and Intuitive Machines

Considering the 90-day investment horizon Spirit Aerosystems Holdings is expected to generate 0.06 times more return on investment than Intuitive Machines. However, Spirit Aerosystems Holdings is 16.45 times less risky than Intuitive Machines. It trades about 0.04 of its potential returns per unit of risk. Intuitive Machines is currently generating about -0.15 per unit of risk. If you would invest  3,387  in Spirit Aerosystems Holdings on December 30, 2024 and sell it today you would earn a total of  85.00  from holding Spirit Aerosystems Holdings or generate 2.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.19%
Values	Daily Returns

Spirit Aerosystems Holdings  vs.  Intuitive Machines

Spirit Aerosystems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Spirit Aerosystems Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Spirit Aerosystems is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Intuitive Machines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Machines 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 fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Spirit Aerosystems and Intuitive Machines

The main advantage of trading using opposite Spirit Aerosystems and Intuitive Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Aerosystems 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 Spirit Aerosystems Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.