Correlation Between TKO Group and Rigetti Computing

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

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

Diversification Opportunities for TKO Group and Rigetti Computing

0.07

Correlation Coefficient

TKO Group  Rigetti Computing

Significant diversification

The 3 months correlation between TKO and Rigetti is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TKO Group Holdings, and Rigetti Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing and TKO Group 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 TKO Group Holdings, 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 TKO Group i.e., TKO Group and Rigetti Computing go up and down completely randomly.

Pair Corralation between TKO Group and Rigetti Computing

Considering the 90-day investment horizon TKO Group is expected to generate 11.83 times less return on investment than Rigetti Computing. But when comparing it to its historical volatility, TKO Group Holdings, is 6.87 times less risky than Rigetti Computing. It trades about 0.05 of its potential returns per unit of risk. Rigetti Computing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  937.00  in Rigetti Computing on December 20, 2024 and sell it today you would earn a total of  53.00  from holding Rigetti Computing or generate 5.66% return on investment over 90 days.

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

TKO Group Holdings,  vs.  Rigetti Computing

TKO Group Holdings,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TKO Group Holdings, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, TKO Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Rigetti Computing

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 6 (%) 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 TKO Group and Rigetti Computing

The main advantage of trading using opposite TKO Group and Rigetti Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKO Group 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 TKO Group Holdings, 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.