Correlation Between IONQ and McDonalds Holdings

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

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

Diversification Opportunities for IONQ and McDonalds Holdings

0.34

Correlation Coefficient

IONQ  McDonalds Holdings

Weak diversification

The 3 months correlation between IONQ and McDonalds is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and McDonalds Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds Holdings 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 McDonalds Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds Holdings has no effect on the direction of IONQ i.e., IONQ and McDonalds Holdings go up and down completely randomly.

Pair Corralation between IONQ and McDonalds Holdings

Given the investment horizon of 90 days IONQ Inc is expected to under-perform the McDonalds Holdings. In addition to that, IONQ is 5.47 times more volatile than McDonalds Holdings. It trades about -0.06 of its total potential returns per unit of risk. McDonalds Holdings is currently generating about 0.0 per unit of volatility. If you would invest  3,729  in McDonalds Holdings on December 28, 2024 and sell it today you would lose (24.00) from holding McDonalds Holdings or give up 0.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

IONQ Inc  vs.  McDonalds Holdings

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.

McDonalds Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days McDonalds Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, McDonalds Holdings 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 McDonalds Holdings

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

The idea behind IONQ Inc and McDonalds Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.