Correlation Between Redwire Corp and Intuitive Machines
Can any of the company-specific risk be diversified away by investing in both Redwire Corp 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 Redwire Corp and Intuitive Machines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redwire Corp and Intuitive Machines, you can compare the effects of market volatilities on Redwire Corp 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 Redwire Corp with a short position of Intuitive Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redwire Corp and Intuitive Machines.
Diversification Opportunities for Redwire Corp and Intuitive Machines
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Redwire and Intuitive is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Redwire Corp and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and Redwire Corp 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 Redwire Corp 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 Redwire Corp i.e., Redwire Corp and Intuitive Machines go up and down completely randomly.
Pair Corralation between Redwire Corp and Intuitive Machines
Considering the 90-day investment horizon Redwire Corp is expected to generate 1.98 times less return on investment than Intuitive Machines. But when comparing it to its historical volatility, Redwire Corp is 1.58 times less risky than Intuitive Machines. It trades about 0.26 of its potential returns per unit of risk. Intuitive Machines is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 807.00 in Intuitive Machines on August 24, 2024 and sell it today you would earn a total of 593.00 from holding Intuitive Machines or generate 73.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redwire Corp vs. Intuitive Machines
Performance |
| Timeline |
| Redwire Corp |
| Intuitive Machines |
Redwire Corp and Intuitive Machines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redwire Corp and Intuitive Machines
The main advantage of trading using opposite Redwire Corp and Intuitive Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redwire Corp 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.| Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
| Intuitive Machines vs. Redwire Corp | Intuitive Machines vs. Sidus Space | Intuitive Machines vs. Rocket Lab USA | Intuitive Machines vs. Momentus |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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