Correlation Between IONQ and Airtel Africa
Can any of the company-specific risk be diversified away by investing in both IONQ and Airtel Africa 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 Airtel Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IONQ Inc and Airtel Africa Plc, you can compare the effects of market volatilities on IONQ and Airtel Africa 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 Airtel Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Airtel Africa.
Diversification Opportunities for IONQ and Airtel Africa
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between IONQ and Airtel is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Airtel Africa Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtel Africa Plc 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 Airtel Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtel Africa Plc has no effect on the direction of IONQ i.e., IONQ and Airtel Africa go up and down completely randomly.
Pair Corralation between IONQ and Airtel Africa
Given the investment horizon of 90 days IONQ Inc is expected to under-perform the Airtel Africa. But the stock apears to be less risky and, when comparing its historical volatility, IONQ Inc is 1.44 times less risky than Airtel Africa. The stock trades about -0.34 of its potential returns per unit of risk. The Airtel Africa Plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 143.00 in Airtel Africa Plc on November 27, 2024 and sell it today you would earn a total of 18.00 from holding Airtel Africa Plc or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
IONQ Inc vs. Airtel Africa Plc
Performance |
| Timeline |
| IONQ Inc |
| Airtel Africa Plc |
IONQ and Airtel Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IONQ and Airtel Africa
The main advantage of trading using opposite IONQ and Airtel Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IONQ position performs unexpectedly, Airtel Africa 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 Airtel Africa will offset losses from the drop in Airtel Africa's long position.The idea behind IONQ Inc and Airtel Africa Plc 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.| Airtel Africa vs. BCE Inc | Airtel Africa vs. Axiologix | Airtel Africa vs. Advanced Info Service | Airtel Africa vs. American Nortel Communications |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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