Correlation Between IONQ and Strauss Group

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

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

Diversification Opportunities for IONQ and Strauss Group

-0.57

Correlation Coefficient

IONQ  Strauss Group

Excellent diversification

The 3 months correlation between IONQ and Strauss is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group 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 Strauss Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of IONQ i.e., IONQ and Strauss Group go up and down completely randomly.

Pair Corralation between IONQ and Strauss Group

Given the investment horizon of 90 days IONQ Inc is expected to generate 4.31 times more return on investment than Strauss Group. However, IONQ is 4.31 times more volatile than Strauss Group. It trades about 0.33 of its potential returns per unit of risk. Strauss Group is currently generating about -0.13 per unit of risk. If you would invest  742.00  in IONQ Inc on August 30, 2024 and sell it today you would earn a total of  2,479  from holding IONQ Inc or generate 334.1% return on investment over 90 days.

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

IONQ Inc  vs.  Strauss Group

IONQ Inc

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 26 (%) 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.

Strauss Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strauss Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IONQ and Strauss Group

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

The idea behind IONQ Inc and Strauss Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.