Correlation Between IONQ and Aeroports

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

By analyzing existing cross correlation between IONQ Inc and Aeroports de Paris, you can compare the effects of market volatilities on IONQ and Aeroports 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 Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Aeroports.

Diversification Opportunities for IONQ and Aeroports

-0.03

Correlation Coefficient

IONQ  Aeroports

Good diversification

The 3 months correlation between IONQ and Aeroports is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris 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 Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of IONQ i.e., IONQ and Aeroports go up and down completely randomly.

Pair Corralation between IONQ and Aeroports

Given the investment horizon of 90 days IONQ Inc is expected to generate 6.82 times more return on investment than Aeroports. However, IONQ is 6.82 times more volatile than Aeroports de Paris. It trades about 0.02 of its potential returns per unit of risk. Aeroports de Paris is currently generating about -0.02 per unit of risk. If you would invest  3,650  in IONQ Inc on November 28, 2024 and sell it today you would lose (677.00) from holding IONQ Inc or give up 18.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

IONQ Inc  vs.  Aeroports de Paris

IONQ Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, IONQ may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Aeroports de Paris

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aeroports de Paris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aeroports is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IONQ and Aeroports

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

The idea behind IONQ Inc and Aeroports de Paris 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.