Correlation Between Iris Energy and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Iris Energy and NETGEAR 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 Iris Energy and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iris Energy and NETGEAR, you can compare the effects of market volatilities on Iris Energy and NETGEAR 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 Iris Energy with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iris Energy and NETGEAR.
Diversification Opportunities for Iris Energy and NETGEAR
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iris and NETGEAR is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Iris Energy and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Iris Energy 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 Iris Energy are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Iris Energy i.e., Iris Energy and NETGEAR go up and down completely randomly.
Pair Corralation between Iris Energy and NETGEAR
Given the investment horizon of 90 days Iris Energy is expected to generate 2.69 times more return on investment than NETGEAR. However, Iris Energy is 2.69 times more volatile than NETGEAR. It trades about 0.08 of its potential returns per unit of risk. NETGEAR is currently generating about 0.03 per unit of risk. If you would invest 217.00 in Iris Energy on October 13, 2024 and sell it today you would earn a total of 883.00 from holding Iris Energy or generate 406.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iris Energy vs. NETGEAR
Performance |
| Timeline |
| Iris Energy |
| NETGEAR |
Iris Energy and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iris Energy and NETGEAR
The main advantage of trading using opposite Iris Energy and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iris Energy position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| Iris Energy vs. Pembina Pipeline | Iris Energy vs. Goosehead Insurance | Iris Energy vs. Pekin Life Insurance | Iris Energy vs. Bowhead Specialty Holdings |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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