Correlation Between IONQ and Infinera

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

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

Diversification Opportunities for IONQ and Infinera

-0.73

Correlation Coefficient

IONQ  Infinera

Pay attention - limited upside

The 3 months correlation between IONQ and Infinera is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera and IONQ 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 IONQ Inc are associated (or correlated) with Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of IONQ i.e., IONQ and Infinera go up and down completely randomly.

Pair Corralation between IONQ and Infinera

Given the investment horizon of 90 days IONQ Inc is expected to generate 21.43 times more return on investment than Infinera. However, IONQ is 21.43 times more volatile than Infinera. It trades about 0.32 of its potential returns per unit of risk. Infinera is currently generating about -0.14 per unit of risk. If you would invest  1,476  in IONQ Inc on September 19, 2024 and sell it today you would earn a total of  2,908  from holding IONQ Inc or generate 197.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

IONQ Inc  vs.  Infinera

IONQ Inc

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, IONQ reported solid returns over the last few months and may actually be approaching a breakup point.

Infinera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinera has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Infinera is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IONQ and Infinera

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

The idea behind IONQ Inc and Infinera 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 Commodity Directory module to find actively traded commodities issued by global exchanges.