Correlation Between IONQ and PAX Global

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

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

Diversification Opportunities for IONQ and PAX Global

0.28

Correlation Coefficient

IONQ  PAX Global

Modest diversification

The 3 months correlation between IONQ and PAX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and PAX Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX Global Technology 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 PAX Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX Global Technology has no effect on the direction of IONQ i.e., IONQ and PAX Global go up and down completely randomly.

Pair Corralation between IONQ and PAX Global

Given the investment horizon of 90 days IONQ Inc is expected to under-perform the PAX Global. In addition to that, IONQ is 4.11 times more volatile than PAX Global Technology. It trades about -0.62 of its total potential returns per unit of risk. PAX Global Technology is currently generating about 0.21 per unit of volatility. If you would invest  58.00  in PAX Global Technology on December 5, 2024 and sell it today you would earn a total of  3.00  from holding PAX Global Technology or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

IONQ Inc  vs.  PAX Global Technology

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.

PAX Global Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days PAX Global Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with IONQ and PAX Global

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

The idea behind IONQ Inc and PAX Global Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.