Correlation Between Intuitive Machines and IONQ

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

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

Diversification Opportunities for Intuitive Machines and IONQ

0.91

Correlation Coefficient

Intuitive Machines  IONQ

Almost no diversification

The 3 months correlation between Intuitive and IONQ is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and IONQ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IONQ Inc and Intuitive Machines 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 Intuitive Machines 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 Intuitive Machines i.e., Intuitive Machines and IONQ go up and down completely randomly.

Pair Corralation between Intuitive Machines and IONQ

Given the investment horizon of 90 days Intuitive Machines is expected to generate 2.66 times less return on investment than IONQ. But when comparing it to its historical volatility, Intuitive Machines is 1.16 times less risky than IONQ. It trades about 0.15 of its potential returns per unit of risk. IONQ Inc is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  783.00  in IONQ Inc on September 18, 2024 and sell it today you would earn a total of  3,398  from holding IONQ Inc or generate 433.97% return on investment over 90 days.

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

Intuitive Machines  vs.  IONQ Inc

Intuitive Machines

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Intuitive Machines reported solid returns over the last few months and may actually be approaching a breakup point.

IONQ Inc

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, IONQ reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Machines and IONQ

The main advantage of trading using opposite Intuitive Machines and IONQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Machines 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 Intuitive Machines 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.