Correlation Between Dennys Corp and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Dennys Corp 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 Dennys Corp and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dennys Corp and Iris Energy, you can compare the effects of market volatilities on Dennys Corp 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 Dennys Corp with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Iris Energy.
Diversification Opportunities for Dennys Corp and Iris Energy
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dennys and Iris is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Dennys Corp 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 Dennys Corp 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 Dennys Corp i.e., Dennys Corp and Iris Energy go up and down completely randomly.
Pair Corralation between Dennys Corp and Iris Energy
Given the investment horizon of 90 days Dennys Corp is expected to generate 0.54 times more return on investment than Iris Energy. However, Dennys Corp is 1.85 times less risky than Iris Energy. It trades about -0.18 of its potential returns per unit of risk. Iris Energy is currently generating about -0.14 per unit of risk. If you would invest 627.00 in Dennys Corp on October 14, 2024 and sell it today you would lose (66.00) from holding Dennys Corp or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dennys Corp vs. Iris Energy
Performance |
| Timeline |
| Dennys Corp |
| Iris Energy |
Dennys Corp and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Iris Energy
The main advantage of trading using opposite Dennys Corp and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp 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.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| Iris Energy vs. Pembina Pipeline | Iris Energy vs. Goosehead Insurance | Iris Energy vs. Pekin Life Insurance | Iris Energy vs. Bowhead Specialty Holdings |
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.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |