Correlation Between IONQ and Quantum

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

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

Diversification Opportunities for IONQ and Quantum

0.56

Correlation Coefficient

IONQ  Quantum

Very weak diversification

The 3 months correlation between IONQ and Quantum is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum 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 Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum has no effect on the direction of IONQ i.e., IONQ and Quantum go up and down completely randomly.

Pair Corralation between IONQ and Quantum

Given the investment horizon of 90 days IONQ is expected to generate 1.77 times less return on investment than Quantum. But when comparing it to its historical volatility, IONQ Inc is 3.21 times less risky than Quantum. It trades about 0.35 of its potential returns per unit of risk. Quantum is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  288.00  in Quantum on August 31, 2024 and sell it today you would earn a total of  1,498  from holding Quantum or generate 520.14% return on investment over 90 days.

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

IONQ Inc  vs.  Quantum

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 conflicting basic indicators, IONQ reported solid returns over the last few months and may actually be approaching a breakup point.

Quantum

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IONQ and Quantum

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

The idea behind IONQ Inc and Quantum 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.