Correlation Between IONQ and Guardforce

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

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

Diversification Opportunities for IONQ and Guardforce

0.36

Correlation Coefficient

IONQ  Guardforce

Weak diversification

The 3 months correlation between IONQ and Guardforce is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI 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 Guardforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardforce AI has no effect on the direction of IONQ i.e., IONQ and Guardforce go up and down completely randomly.

Pair Corralation between IONQ and Guardforce

Given the investment horizon of 90 days IONQ Inc is expected to generate 1.44 times more return on investment than Guardforce. However, IONQ is 1.44 times more volatile than Guardforce AI Co. It trades about 0.31 of its potential returns per unit of risk. Guardforce AI Co is currently generating about 0.01 per unit of risk. If you would invest  1,474  in IONQ Inc on September 23, 2024 and sell it today you would earn a total of  2,968  from holding IONQ Inc or generate 201.36% return on investment over 90 days.

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

IONQ Inc  vs.  Guardforce AI Co

IONQ Inc

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, IONQ reported solid returns over the last few months and may actually be approaching a breakup point.

Guardforce AI

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Guardforce is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IONQ and Guardforce

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

The idea behind IONQ Inc and Guardforce AI Co 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.