Correlation Between IONQ and Identiv

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

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

Diversification Opportunities for IONQ and Identiv

0.85

Correlation Coefficient

IONQ  Identiv

Very poor diversification

The 3 months correlation between IONQ and Identiv is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of IONQ i.e., IONQ and Identiv go up and down completely randomly.

Pair Corralation between IONQ and Identiv

Given the investment horizon of 90 days IONQ Inc is expected to generate 2.54 times more return on investment than Identiv. However, IONQ is 2.54 times more volatile than Identiv. It trades about 0.33 of its potential returns per unit of risk. Identiv is currently generating about 0.07 per unit of risk. If you would invest  2,352  in IONQ Inc on September 10, 2024 and sell it today you would earn a total of  1,445  from holding IONQ Inc or generate 61.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

IONQ Inc  vs.  Identiv

IONQ Inc

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 27 (%) 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.

Identiv

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Identiv exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IONQ and Identiv

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

The idea behind IONQ Inc and Identiv 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.