Correlation Between 456837AW3 and Intuitive Machines

Can any of the company-specific risk be diversified away by investing in both 456837AW3 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 456837AW3 and Intuitive Machines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ING GROEP NV and Intuitive Machines, you can compare the effects of market volatilities on 456837AW3 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 456837AW3 with a short position of Intuitive Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of 456837AW3 and Intuitive Machines.

Diversification Opportunities for 456837AW3 and Intuitive Machines

-0.69

Correlation Coefficient

456837AW3  Intuitive Machines

Excellent diversification

The 3 months correlation between 456837AW3 and Intuitive is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ING GROEP NV and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and 456837AW3 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 ING GROEP NV 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 456837AW3 i.e., 456837AW3 and Intuitive Machines go up and down completely randomly.

Pair Corralation between 456837AW3 and Intuitive Machines

Assuming the 90 days trading horizon 456837AW3 is expected to generate 26.05 times less return on investment than Intuitive Machines. But when comparing it to its historical volatility, ING GROEP NV is 19.14 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 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,009  in Intuitive Machines on September 19, 2024 and sell it today you would earn a total of  380.00  from holding Intuitive Machines or generate 37.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	74.32%
Values	Daily Returns

ING GROEP NV  vs.  Intuitive Machines

ING GROEP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING GROEP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456837AW3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intuitive Machines

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Intuitive Machines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 456837AW3 and Intuitive Machines

The main advantage of trading using opposite 456837AW3 and Intuitive Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 456837AW3 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 ING GROEP NV 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.