Correlation Between Hut 8 and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Hut 8 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 Hut 8 and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hut 8 Corp and Iris Energy, you can compare the effects of market volatilities on Hut 8 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 Hut 8 with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Iris Energy.
Diversification Opportunities for Hut 8 and Iris Energy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hut and Iris is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Hut 8 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 Hut 8 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 Hut 8 i.e., Hut 8 and Iris Energy go up and down completely randomly.
Pair Corralation between Hut 8 and Iris Energy
Considering the 90-day investment horizon Hut 8 is expected to generate 1.28 times less return on investment than Iris Energy. But when comparing it to its historical volatility, Hut 8 Corp is 1.18 times less risky than Iris Energy. It trades about 0.08 of its potential returns per unit of risk. Iris Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Iris Energy on August 24, 2024 and sell it today you would earn a total of 917.00 from holding Iris Energy or generate 569.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hut 8 Corp vs. Iris Energy
Performance |
| Timeline |
| Hut 8 Corp |
| Iris Energy |
Hut 8 and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hut 8 and Iris Energy
The main advantage of trading using opposite Hut 8 and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 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 Hut 8 Corp 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. HIVE Blockchain Technologies | Iris Energy vs. CleanSpark | Iris Energy vs. Marathon Digital Holdings | Iris Energy vs. Riot Blockchain |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |