Correlation Between Iris Energy and Stronghold Digital
Can any of the company-specific risk be diversified away by investing in both Iris Energy and Stronghold Digital 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 Stronghold Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iris Energy and Stronghold Digital Mining, you can compare the effects of market volatilities on Iris Energy and Stronghold Digital 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 Stronghold Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iris Energy and Stronghold Digital.
Diversification Opportunities for Iris Energy and Stronghold Digital
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iris and Stronghold is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Iris Energy and Stronghold Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stronghold Digital Mining 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 Stronghold Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stronghold Digital Mining has no effect on the direction of Iris Energy i.e., Iris Energy and Stronghold Digital go up and down completely randomly.
Pair Corralation between Iris Energy and Stronghold Digital
Given the investment horizon of 90 days Iris Energy is expected to generate 1.53 times more return on investment than Stronghold Digital. However, Iris Energy is 1.53 times more volatile than Stronghold Digital Mining. It trades about 0.03 of its potential returns per unit of risk. Stronghold Digital Mining is currently generating about -0.05 per unit of risk. If you would invest 1,046 in Iris Energy on November 3, 2024 and sell it today you would lose (17.50) from holding Iris Energy or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iris Energy vs. Stronghold Digital Mining
Performance |
| Timeline |
| Iris Energy |
| Stronghold Digital Mining |
Iris Energy and Stronghold Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iris Energy and Stronghold Digital
The main advantage of trading using opposite Iris Energy and Stronghold Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iris Energy position performs unexpectedly, Stronghold Digital 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 Stronghold Digital will offset losses from the drop in Stronghold Digital's long position.| Iris Energy vs. Old Dominion Freight | Iris Energy vs. flyExclusive, | Iris Energy vs. PepsiCo | Iris Energy vs. Lindblad Expeditions Holdings |
| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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