Correlation Between Desktop Metal and IONQ
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and IONQ 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 Desktop Metal and IONQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and IONQ Inc, you can compare the effects of market volatilities on Desktop Metal and IONQ 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 Desktop Metal with a short position of IONQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and IONQ.
Diversification Opportunities for Desktop Metal and IONQ
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Desktop and IONQ is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and IONQ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IONQ Inc and Desktop Metal 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 Desktop Metal are associated (or correlated) with IONQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IONQ Inc has no effect on the direction of Desktop Metal i.e., Desktop Metal and IONQ go up and down completely randomly.
Pair Corralation between Desktop Metal and IONQ
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 3.15 times more return on investment than IONQ. However, Desktop Metal is 3.15 times more volatile than IONQ Inc. It trades about 0.27 of its potential returns per unit of risk. IONQ Inc is currently generating about 0.06 per unit of risk. If you would invest 249.00 in Desktop Metal on January 13, 2025 and sell it today you would earn a total of 247.00 from holding Desktop Metal or generate 99.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Desktop Metal vs. IONQ Inc
Performance |
| Timeline |
| Desktop Metal |
Risk-Adjusted Performance
OK
Weak | Strong |
| IONQ Inc |
Desktop Metal and IONQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and IONQ
The main advantage of trading using opposite Desktop Metal and IONQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, IONQ 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 will offset losses from the drop in IONQ's long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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