Correlation Between Amphenol and Rigetti Computing

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

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

Diversification Opportunities for Amphenol and Rigetti Computing

0.53

Correlation Coefficient

Amphenol  Rigetti Computing

Very weak diversification

The 3 months correlation between Amphenol and Rigetti is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and Rigetti Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing and Amphenol 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 Amphenol are associated (or correlated) with Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of Amphenol i.e., Amphenol and Rigetti Computing go up and down completely randomly.

Pair Corralation between Amphenol and Rigetti Computing

Considering the 90-day investment horizon Amphenol is expected to generate 41.3 times less return on investment than Rigetti Computing. But when comparing it to its historical volatility, Amphenol is 9.15 times less risky than Rigetti Computing. It trades about 0.08 of its potential returns per unit of risk. Rigetti Computing is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  76.00  in Rigetti Computing on September 24, 2024 and sell it today you would earn a total of  1,035  from holding Rigetti Computing or generate 1361.84% return on investment over 90 days.

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

Amphenol  vs.  Rigetti Computing

Amphenol

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Amphenol may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Rigetti Computing

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Rigetti Computing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amphenol and Rigetti Computing

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

The idea behind Amphenol and Rigetti Computing 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.