Correlation Between Microvast Holdings and IONQ WT

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

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

Diversification Opportunities for Microvast Holdings and IONQ WT

0.0

Correlation Coefficient

Microvast Holdings  IONQ WT

Pay attention - limited upside

The 3 months correlation between Microvast and IONQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and IONQ WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IONQ WT and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with IONQ WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IONQ WT has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and IONQ WT go up and down completely randomly.

Pair Corralation between Microvast Holdings and IONQ WT

Assuming the 90 days horizon Microvast Holdings is expected to generate 2.8 times more return on investment than IONQ WT. However, Microvast Holdings is 2.8 times more volatile than IONQ WT. It trades about 0.05 of its potential returns per unit of risk. IONQ WT is currently generating about -0.8 per unit of risk. If you would invest  25.00  in Microvast Holdings on September 14, 2024 and sell it today you would lose (11.00) from holding Microvast Holdings or give up 44.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.03%
Values	Daily Returns

Microvast Holdings  vs.  IONQ WT

Microvast Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microvast Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Microvast Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

IONQ WT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IONQ WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Microvast Holdings and IONQ WT

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

The idea behind Microvast Holdings and IONQ WT 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.