Correlation Between Seagate Technology and Rigetti Computing

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

By analyzing existing cross correlation between Seagate Technology PLC and Rigetti Computing, you can compare the effects of market volatilities on Seagate Technology and Rigetti Computing 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 Seagate Technology with a short position of Rigetti Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and Rigetti Computing.

Diversification Opportunities for Seagate Technology and Rigetti Computing

-0.5

Correlation Coefficient

Seagate Technology  Rigetti Computing

Very good diversification

The 3 months correlation between Seagate and Rigetti is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology PLC and Rigetti Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing and Seagate Technology 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 Seagate Technology PLC are associated (or correlated) with Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of Seagate Technology i.e., Seagate Technology and Rigetti Computing go up and down completely randomly.

Pair Corralation between Seagate Technology and Rigetti Computing

Considering the 90-day investment horizon Seagate Technology PLC is expected to under-perform the Rigetti Computing. But the stock apears to be less risky and, when comparing its historical volatility, Seagate Technology PLC is 7.4 times less risky than Rigetti Computing. The stock trades about -0.02 of its potential returns per unit of risk. The Rigetti Computing is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Rigetti Computing on September 13, 2024 and sell it today you would earn a total of  564.00  from holding Rigetti Computing or generate 663.53% return on investment over 90 days.

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

Seagate Technology PLC  vs.  Rigetti Computing

Seagate Technology PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seagate Technology PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Seagate Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Rigetti Computing

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Rigetti Computing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seagate Technology and Rigetti Computing

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

The idea behind Seagate Technology PLC and Rigetti Computing 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.