Correlation Between IONQ and Sekisui House

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

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

Diversification Opportunities for IONQ and Sekisui House

-0.77

Correlation Coefficient

IONQ  Sekisui House

Pay attention - limited upside

The 3 months correlation between IONQ and Sekisui is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Sekisui House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui House 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 Sekisui House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui House has no effect on the direction of IONQ i.e., IONQ and Sekisui House go up and down completely randomly.

Pair Corralation between IONQ and Sekisui House

Given the investment horizon of 90 days IONQ Inc is expected to generate 2.7 times more return on investment than Sekisui House. However, IONQ is 2.7 times more volatile than Sekisui House. It trades about 0.33 of its potential returns per unit of risk. Sekisui House is currently generating about -0.07 per unit of risk. If you would invest  738.00  in IONQ Inc on September 12, 2024 and sell it today you would earn a total of  2,559  from holding IONQ Inc or generate 346.75% return on investment over 90 days.

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

IONQ Inc  vs.  Sekisui House

IONQ Inc

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IONQ reported solid returns over the last few months and may actually be approaching a breakup point.

Sekisui House

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sekisui House has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IONQ and Sekisui House

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

The idea behind IONQ Inc and Sekisui House 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.