Correlation Between United States and Intuit

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

By analyzing existing cross correlation between United States Steel and Intuit Inc, you can compare the effects of market volatilities on United States and Intuit 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 United States with a short position of Intuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Intuit.

Diversification Opportunities for United States and Intuit

0.1

Correlation Coefficient

United States  Intuit

Average diversification

The 3 months correlation between United and Intuit is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and United States 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 United States Steel are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of United States i.e., United States and Intuit go up and down completely randomly.

Pair Corralation between United States and Intuit

Given the investment horizon of 90 days United States is expected to generate 1.19 times less return on investment than Intuit. In addition to that, United States is 1.86 times more volatile than Intuit Inc. It trades about 0.03 of its total potential returns per unit of risk. Intuit Inc is currently generating about 0.07 per unit of volatility. If you would invest  721,172  in Intuit Inc on October 13, 2024 and sell it today you would earn a total of  569,998  from holding Intuit Inc or generate 79.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

United States Steel  vs.  Intuit Inc

United States Steel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, United States is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intuit Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with United States and Intuit

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

The idea behind United States Steel and Intuit Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.