Correlation Between 3D Systems and IONQ

Can any of the company-specific risk be diversified away by investing in both 3D Systems and IONQ 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 3D Systems and IONQ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3D Systems and IONQ Inc, you can compare the effects of market volatilities on 3D Systems and IONQ 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 3D Systems with a short position of IONQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and IONQ.

Diversification Opportunities for 3D Systems and IONQ

0.12

Correlation Coefficient

3D Systems  IONQ

Average diversification

The 3 months correlation between DDD and IONQ is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and IONQ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IONQ Inc and 3D Systems 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 3D Systems are associated (or correlated) with IONQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IONQ Inc has no effect on the direction of 3D Systems i.e., 3D Systems and IONQ go up and down completely randomly.

Pair Corralation between 3D Systems and IONQ

Considering the 90-day investment horizon 3D Systems is expected to generate 0.67 times more return on investment than IONQ. However, 3D Systems is 1.5 times less risky than IONQ. It trades about 0.08 of its potential returns per unit of risk. IONQ Inc is currently generating about 0.01 per unit of risk. If you would invest  279.00  in 3D Systems on December 1, 2024 and sell it today you would earn a total of  60.00  from holding 3D Systems or generate 21.51% return on investment over 90 days.

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

3D Systems  vs.  IONQ Inc

3D Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 3D Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, 3D Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

IONQ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days IONQ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IONQ is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with 3D Systems and IONQ

The main advantage of trading using opposite 3D Systems and IONQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3D Systems position performs unexpectedly, IONQ 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 IONQ will offset losses from the drop in IONQ's long position.

The idea behind 3D Systems and IONQ Inc 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.