Correlation Between Canaan and Rigetti Computing
Can any of the company-specific risk be diversified away by investing in both Canaan and Rigetti Computing 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 Canaan and Rigetti Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaan Inc and Rigetti Computing, you can compare the effects of market volatilities on Canaan and Rigetti Computing 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 Canaan with a short position of Rigetti Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaan and Rigetti Computing.
Diversification Opportunities for Canaan and Rigetti Computing
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canaan and Rigetti is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Canaan Inc and Rigetti Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing and Canaan 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 Canaan Inc are associated (or correlated) with Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of Canaan i.e., Canaan and Rigetti Computing go up and down completely randomly.
Pair Corralation between Canaan and Rigetti Computing
Considering the 90-day investment horizon Canaan is expected to generate 2.76 times less return on investment than Rigetti Computing. But when comparing it to its historical volatility, Canaan Inc is 1.24 times less risky than Rigetti Computing. It trades about 0.03 of its potential returns per unit of risk. Rigetti Computing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Rigetti Computing on August 28, 2024 and sell it today you would earn a total of 175.00 from holding Rigetti Computing or generate 175.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaan Inc vs. Rigetti Computing
Performance |
| Timeline |
| Canaan Inc |
| Rigetti Computing |
Canaan and Rigetti Computing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaan and Rigetti Computing
The main advantage of trading using opposite Canaan and Rigetti Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaan position performs unexpectedly, Rigetti Computing 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 Rigetti Computing will offset losses from the drop in Rigetti Computing's long position.| Canaan vs. 3D Systems | Canaan vs. NetApp Inc | Canaan vs. Rigetti Computing | Canaan vs. Logitech International SA |
| Rigetti Computing vs. Quantum Computing | Rigetti Computing vs. IONQ Inc | Rigetti Computing vs. Desktop Metal | Rigetti Computing vs. Quantum |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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