Correlation Between Markforged Holding and IONQ

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

By analyzing existing cross correlation between Markforged Holding Corp and IONQ Inc, you can compare the effects of market volatilities on Markforged Holding and IONQ 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 Markforged Holding with a short position of IONQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markforged Holding and IONQ.

Diversification Opportunities for Markforged Holding and IONQ

0.34

Correlation Coefficient

Markforged Holding  IONQ

Weak diversification

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

Pair Corralation between Markforged Holding and IONQ

Given the investment horizon of 90 days Markforged Holding Corp is expected to generate 0.62 times more return on investment than IONQ. However, Markforged Holding Corp is 1.61 times less risky than IONQ. It trades about 0.14 of its potential returns per unit of risk. IONQ Inc is currently generating about -0.06 per unit of risk. If you would invest  314.00  in Markforged Holding Corp on December 29, 2024 and sell it today you would earn a total of  149.00  from holding Markforged Holding Corp or generate 47.45% return on investment over 90 days.

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

Markforged Holding Corp  vs.  IONQ Inc

Markforged Holding Corp

Risk-Adjusted Performance

OK

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

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.

Pair Trading with Markforged Holding and IONQ

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

The idea behind Markforged Holding Corp and IONQ Inc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.