Correlation Between Intuitive Machines and Swatch Group

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

By analyzing existing cross correlation between Intuitive Machines and Swatch Group AG, you can compare the effects of market volatilities on Intuitive Machines and Swatch Group 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 Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Machines and Swatch Group.

Diversification Opportunities for Intuitive Machines and Swatch Group

-0.72

Correlation Coefficient

Intuitive Machines  Swatch Group

Pay attention - limited upside

The 3 months correlation between Intuitive and Swatch is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Swatch Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group AG 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 Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group AG has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Swatch Group go up and down completely randomly.

Pair Corralation between Intuitive Machines and Swatch Group

Given the investment horizon of 90 days Intuitive Machines is expected to generate 5.07 times more return on investment than Swatch Group. However, Intuitive Machines is 5.07 times more volatile than Swatch Group AG. It trades about 0.04 of its potential returns per unit of risk. Swatch Group AG is currently generating about -0.1 per unit of risk. If you would invest  1,256  in Intuitive Machines on September 20, 2024 and sell it today you would earn a total of  22.00  from holding Intuitive Machines or generate 1.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Intuitive Machines  vs.  Swatch Group AG

Intuitive Machines

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 8 (%) 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.

Swatch Group AG

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Swatch Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Swatch Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intuitive Machines and Swatch Group

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

The idea behind Intuitive Machines and Swatch Group AG 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.