Correlation Between Arqit Quantum and Rigetti Computing

Can any of the company-specific risk be diversified away by investing in both Arqit Quantum and Rigetti Computing 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 Arqit Quantum and Rigetti Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arqit Quantum and Rigetti Computing Warrants, you can compare the effects of market volatilities on Arqit Quantum and Rigetti Computing 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 Arqit Quantum with a short position of Rigetti Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arqit Quantum and Rigetti Computing.

Diversification Opportunities for Arqit Quantum and Rigetti Computing

0.57

Correlation Coefficient

Arqit Quantum  Rigetti Computing

Very weak diversification

The 3 months correlation between Arqit and Rigetti is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and Rigetti Computing Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing and Arqit Quantum 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 Arqit Quantum are associated (or correlated) with Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of Arqit Quantum i.e., Arqit Quantum and Rigetti Computing go up and down completely randomly.

Pair Corralation between Arqit Quantum and Rigetti Computing

Given the investment horizon of 90 days Arqit Quantum is expected to generate 31.3 times less return on investment than Rigetti Computing. But when comparing it to its historical volatility, Arqit Quantum is 1.91 times less risky than Rigetti Computing. It trades about 0.01 of its potential returns per unit of risk. Rigetti Computing Warrants is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Rigetti Computing Warrants on November 29, 2024 and sell it today you would earn a total of  194.00  from holding Rigetti Computing Warrants or generate 161.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Arqit Quantum  vs.  Rigetti Computing Warrants

Arqit Quantum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arqit Quantum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Arqit Quantum may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Rigetti Computing

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing Warrants are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Rigetti Computing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arqit Quantum and Rigetti Computing

The main advantage of trading using opposite Arqit Quantum and Rigetti Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arqit Quantum position performs unexpectedly, Rigetti Computing 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 Rigetti Computing will offset losses from the drop in Rigetti Computing's long position.

The idea behind Arqit Quantum and Rigetti Computing Warrants 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.