Correlation Between Bill and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Bill and Iris Energy 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 Bill and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bill Com Holdings and Iris Energy, you can compare the effects of market volatilities on Bill and Iris Energy 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 Bill with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and Iris Energy.
Diversification Opportunities for Bill and Iris Energy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bill and Iris is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Bill 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 Bill Com Holdings are associated (or correlated) with Iris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Energy has no effect on the direction of Bill i.e., Bill and Iris Energy go up and down completely randomly.
Pair Corralation between Bill and Iris Energy
Given the investment horizon of 90 days Bill is expected to generate 1.07 times less return on investment than Iris Energy. But when comparing it to its historical volatility, Bill Com Holdings is 2.13 times less risky than Iris Energy. It trades about 0.45 of its potential returns per unit of risk. Iris Energy is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 912.00 in Iris Energy on September 1, 2024 and sell it today you would earn a total of 439.00 from holding Iris Energy or generate 48.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bill Com Holdings vs. Iris Energy
Performance |
| Timeline |
| Bill Com Holdings |
| Iris Energy |
Bill and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill and Iris Energy
The main advantage of trading using opposite Bill and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill position performs unexpectedly, Iris Energy 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 Iris Energy will offset losses from the drop in Iris Energy's long position.The idea behind Bill Com Holdings and Iris Energy 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.| Iris Energy vs. Pentair PLC | Iris Energy vs. AerSale Corp | Iris Energy vs. Hawkins | Iris Energy vs. Chemours Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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