Correlation Between Western Sierra and Intuitive Machines

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

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

Diversification Opportunities for Western Sierra and Intuitive Machines

0.04

Correlation Coefficient

Western Sierra  Intuitive Machines

Significant diversification

The 3 months correlation between Western and Intuitive is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Western Sierra Mining and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and Western Sierra 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 Western Sierra Mining 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 Western Sierra i.e., Western Sierra and Intuitive Machines go up and down completely randomly.

Pair Corralation between Western Sierra and Intuitive Machines

Given the investment horizon of 90 days Western Sierra Mining is expected to generate 6.07 times more return on investment than Intuitive Machines. However, Western Sierra is 6.07 times more volatile than Intuitive Machines. It trades about 0.11 of its potential returns per unit of risk. Intuitive Machines is currently generating about -0.15 per unit of risk. If you would invest  0.35  in Western Sierra Mining on December 30, 2024 and sell it today you would lose (0.33) from holding Western Sierra Mining or give up 94.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	70.77%
Values	Daily Returns

Western Sierra Mining  vs.  Intuitive Machines

Western Sierra Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Western Sierra Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Western Sierra exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 Western Sierra and Intuitive Machines

The main advantage of trading using opposite Western Sierra and Intuitive Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Sierra 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 Western Sierra Mining 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.