Correlation Between Stagwell and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Stagwell 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 Stagwell and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Iris Energy, you can compare the effects of market volatilities on Stagwell 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 Stagwell with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Iris Energy.
Diversification Opportunities for Stagwell and Iris Energy
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stagwell and Iris is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and Iris Energy go up and down completely randomly.
Pair Corralation between Stagwell and Iris Energy
Given the investment horizon of 90 days Stagwell is expected to generate 0.3 times more return on investment than Iris Energy. However, Stagwell is 3.38 times less risky than Iris Energy. It trades about 0.43 of its potential returns per unit of risk. Iris Energy is currently generating about 0.12 per unit of risk. If you would invest 615.00 in Stagwell on August 26, 2024 and sell it today you would earn a total of 167.00 from holding Stagwell or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. Iris Energy
Performance |
| Timeline |
| Stagwell |
| Iris Energy |
Stagwell and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and Iris Energy
The main advantage of trading using opposite Stagwell and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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.| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
| Iris Energy vs. Corporacion America Airports | Iris Energy vs. Mayfair Gold Corp | Iris Energy vs. AerCap Holdings NV | Iris Energy vs. United Rentals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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