Correlation Between IONQ and Golden Lake
Can any of the company-specific risk be diversified away by investing in both IONQ and Golden Lake 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 Golden Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IONQ Inc and Golden Lake Exploration, you can compare the effects of market volatilities on IONQ and Golden Lake 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 Golden Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Golden Lake.
Diversification Opportunities for IONQ and Golden Lake
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IONQ and Golden is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Golden Lake Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Lake Exploration 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 Golden Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Lake Exploration has no effect on the direction of IONQ i.e., IONQ and Golden Lake go up and down completely randomly.
Pair Corralation between IONQ and Golden Lake
Given the investment horizon of 90 days IONQ Inc is expected to under-perform the Golden Lake. But the stock apears to be less risky and, when comparing its historical volatility, IONQ Inc is 2.42 times less risky than Golden Lake. The stock trades about -0.28 of its potential returns per unit of risk. The Golden Lake Exploration is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2.83 in Golden Lake Exploration on November 27, 2024 and sell it today you would earn a total of 1.79 from holding Golden Lake Exploration or generate 63.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IONQ Inc vs. Golden Lake Exploration
Performance |
| Timeline |
| IONQ Inc |
| Golden Lake Exploration |
IONQ and Golden Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IONQ and Golden Lake
The main advantage of trading using opposite IONQ and Golden Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IONQ position performs unexpectedly, Golden Lake 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 Golden Lake will offset losses from the drop in Golden Lake's long position.The idea behind IONQ Inc and Golden Lake Exploration 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.| Golden Lake vs. Prime Meridian Resources | Golden Lake vs. Macmahon Holdings Limited | Golden Lake vs. Rokmaster Resources Corp | Golden Lake vs. Hudson Resources |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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