Correlation Between Intuitive Machines and Champion Iron

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

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

Diversification Opportunities for Intuitive Machines and Champion Iron

-0.36

Correlation Coefficient

Intuitive Machines  Champion Iron

Very good diversification

The 3 months correlation between Intuitive and Champion is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Champion Iron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron Limited and Intuitive Machines 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 Intuitive Machines are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron Limited has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Champion Iron go up and down completely randomly.

Pair Corralation between Intuitive Machines and Champion Iron

Given the investment horizon of 90 days Intuitive Machines is expected to generate 2.21 times more return on investment than Champion Iron. However, Intuitive Machines is 2.21 times more volatile than Champion Iron Limited. It trades about 0.11 of its potential returns per unit of risk. Champion Iron Limited is currently generating about -0.01 per unit of risk. If you would invest  259.00  in Intuitive Machines on September 15, 2024 and sell it today you would earn a total of  910.00  from holding Intuitive Machines or generate 351.35% return on investment over 90 days.

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

Intuitive Machines  vs.  Champion Iron Limited

Intuitive Machines

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 13 (%) 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.

Champion Iron Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Champion Iron Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Champion Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Machines and Champion Iron

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

The idea behind Intuitive Machines and Champion Iron Limited 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.