Correlation Between Alien Metals and Intuitive Investments

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

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

Diversification Opportunities for Alien Metals and Intuitive Investments

0.41

Correlation Coefficient

Alien Metals  Intuitive Investments

Very weak diversification

The 3 months correlation between Alien and Intuitive is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alien Metals and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments and Alien Metals 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 Alien Metals are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Alien Metals i.e., Alien Metals and Intuitive Investments go up and down completely randomly.

Pair Corralation between Alien Metals and Intuitive Investments

Assuming the 90 days trading horizon Alien Metals is expected to generate 7.37 times less return on investment than Intuitive Investments. But when comparing it to its historical volatility, Alien Metals is 1.57 times less risky than Intuitive Investments. It trades about 0.01 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  12,450  in Intuitive Investments Group on October 6, 2024 and sell it today you would earn a total of  350.00  from holding Intuitive Investments Group or generate 2.81% return on investment over 90 days.

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

Alien Metals  vs.  Intuitive Investments Group

Alien Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alien Metals 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Alien Metals and Intuitive Investments

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

The idea behind Alien Metals and Intuitive Investments Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.