Correlation Between IONQ and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both IONQ and Xinjiang Goldwind 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 Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IONQ Inc and Xinjiang Goldwind Science, you can compare the effects of market volatilities on IONQ and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Xinjiang Goldwind.
Diversification Opportunities for IONQ and Xinjiang Goldwind
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IONQ and Xinjiang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of IONQ i.e., IONQ and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between IONQ and Xinjiang Goldwind
Given the investment horizon of 90 days IONQ Inc is expected to generate 3.93 times more return on investment than Xinjiang Goldwind. However, IONQ is 3.93 times more volatile than Xinjiang Goldwind Science. It trades about 0.28 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.21 per unit of risk. If you would invest 1,781 in IONQ Inc on August 29, 2024 and sell it today you would earn a total of 1,284 from holding IONQ Inc or generate 72.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IONQ Inc vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| IONQ Inc |
| Xinjiang Goldwind Science |
IONQ and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IONQ and Xinjiang Goldwind
The main advantage of trading using opposite IONQ and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IONQ position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.The idea behind IONQ Inc and Xinjiang Goldwind Science 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.| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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