Correlation Between IONQ and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both IONQ and Lundin Energy 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 Lundin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IONQ Inc and Lundin Energy AB, you can compare the effects of market volatilities on IONQ and Lundin Energy 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 Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Lundin Energy.
Diversification Opportunities for IONQ and Lundin Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IONQ and Lundin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB 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 Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of IONQ i.e., IONQ and Lundin Energy go up and down completely randomly.
Pair Corralation between IONQ and Lundin Energy
Given the investment horizon of 90 days IONQ Inc is expected to generate 5.29 times more return on investment than Lundin Energy. However, IONQ is 5.29 times more volatile than Lundin Energy AB. It trades about 0.2 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.14 per unit of risk. If you would invest 1,485 in IONQ Inc on November 1, 2024 and sell it today you would earn a total of 2,396 from holding IONQ Inc or generate 161.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IONQ Inc vs. Lundin Energy AB
Performance |
| Timeline |
| IONQ Inc |
| Lundin Energy AB |
IONQ and Lundin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IONQ and Lundin Energy
The main advantage of trading using opposite IONQ and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IONQ position performs unexpectedly, Lundin Energy 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 Lundin Energy will offset losses from the drop in Lundin Energy's long position.The idea behind IONQ Inc and Lundin Energy AB 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.| Lundin Energy vs. Renew Energy Global | Lundin Energy vs. Energy Vault Holdings | Lundin Energy vs. Fluence Energy | Lundin Energy vs. Advent Technologies Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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