Correlation Between Qudian and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Qudian 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 Qudian and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and Iris Energy, you can compare the effects of market volatilities on Qudian 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 Qudian with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Iris Energy.
Diversification Opportunities for Qudian and Iris Energy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qudian and Iris is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Qudian 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 Qudian Inc 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 Qudian i.e., Qudian and Iris Energy go up and down completely randomly.
Pair Corralation between Qudian and Iris Energy
Allowing for the 90-day total investment horizon Qudian is expected to generate 2.82 times less return on investment than Iris Energy. But when comparing it to its historical volatility, Qudian Inc is 2.15 times less risky than Iris Energy. It trades about 0.06 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 222.00 in Iris Energy on October 28, 2024 and sell it today you would earn a total of 1,110 from holding Iris Energy or generate 500.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. Iris Energy
Performance |
| Timeline |
| Qudian Inc |
| Iris Energy |
Qudian and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Iris Energy
The main advantage of trading using opposite Qudian and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian 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.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| Iris Energy vs. Siriuspoint | Iris Energy vs. Alvotech | Iris Energy vs. Alto Neuroscience, | Iris Energy vs. Asure Software |
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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