Correlation Between IONQ and BacTech Environmental

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

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

Diversification Opportunities for IONQ and BacTech Environmental

-0.75

Correlation Coefficient

IONQ  BacTech Environmental

Pay attention - limited upside

The 3 months correlation between IONQ and BacTech is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and BacTech Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BacTech Environmental 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 BacTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BacTech Environmental has no effect on the direction of IONQ i.e., IONQ and BacTech Environmental go up and down completely randomly.

Pair Corralation between IONQ and BacTech Environmental

Given the investment horizon of 90 days IONQ Inc is expected to under-perform the BacTech Environmental. In addition to that, IONQ is 1.36 times more volatile than BacTech Environmental. It trades about -0.06 of its total potential returns per unit of risk. BacTech Environmental is currently generating about 0.13 per unit of volatility. If you would invest  2.10  in BacTech Environmental on December 27, 2024 and sell it today you would earn a total of  1.08  from holding BacTech Environmental or generate 51.43% return on investment over 90 days.

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

IONQ Inc  vs.  BacTech Environmental

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 inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

BacTech Environmental

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BacTech Environmental are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, BacTech Environmental reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IONQ and BacTech Environmental

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

The idea behind IONQ Inc and BacTech Environmental 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..