Correlation Between Carlyle and Iris Energy

Can any of the company-specific risk be diversified away by investing in both Carlyle 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 Carlyle and Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlyle Group and Iris Energy, you can compare the effects of market volatilities on Carlyle 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 Carlyle with a short position of Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Iris Energy.

Diversification Opportunities for Carlyle and Iris Energy

0.76

Correlation Coefficient

Carlyle  Iris Energy

Poor diversification

The 3 months correlation between Carlyle and Iris is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Carlyle 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 Carlyle Group 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 Carlyle i.e., Carlyle and Iris Energy go up and down completely randomly.

Pair Corralation between Carlyle and Iris Energy

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.39 times more return on investment than Iris Energy. However, Carlyle Group is 2.56 times less risky than Iris Energy. It trades about -0.04 of its potential returns per unit of risk. Iris Energy is currently generating about -0.08 per unit of risk. If you would invest  5,053  in Carlyle Group on December 27, 2024 and sell it today you would lose (441.00) from holding Carlyle Group or give up 8.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Carlyle Group  vs.  Iris Energy

Carlyle Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Iris Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iris Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Carlyle and Iris Energy

The main advantage of trading using opposite Carlyle and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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.

The idea behind Carlyle Group and Iris Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.