Correlation Between Hawkins and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and Iris Energy, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Iris Energy.
Diversification Opportunities for Hawkins and Iris Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hawkins and Iris is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and Iris Energy go up and down completely randomly.
Pair Corralation between Hawkins and Iris Energy
Given the investment horizon of 90 days Hawkins is expected to generate 2.27 times less return on investment than Iris Energy. But when comparing it to its historical volatility, Hawkins is 2.76 times less risky than Iris Energy. It trades about 0.13 of its potential returns per unit of risk. Iris Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Iris Energy on September 3, 2024 and sell it today you would earn a total of 810.00 from holding Iris Energy or generate 149.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. Iris Energy
Performance |
| Timeline |
| Hawkins |
| Iris Energy |
Hawkins and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and Iris Energy
The main advantage of trading using opposite Hawkins and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| Iris Energy vs. WiMi Hologram Cloud | Iris Energy vs. Grupo Televisa SAB | Iris Energy vs. Radcom | Iris Energy vs. Tesla Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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