Correlation Between Iris Energy and HIVE Blockchain

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

By analyzing existing cross correlation between Iris Energy and HIVE Blockchain Technologies, you can compare the effects of market volatilities on Iris Energy and HIVE Blockchain 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 HIVE Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iris Energy and HIVE Blockchain.

Diversification Opportunities for Iris Energy and HIVE Blockchain

0.88

Correlation Coefficient

Iris Energy  HIVE Blockchain

Very poor diversification

The 3 months correlation between Iris and HIVE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Iris Energy and HIVE Blockchain Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIVE Blockchain Tech 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 HIVE Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIVE Blockchain Tech has no effect on the direction of Iris Energy i.e., Iris Energy and HIVE Blockchain go up and down completely randomly.

Pair Corralation between Iris Energy and HIVE Blockchain

Given the investment horizon of 90 days Iris Energy is expected to generate 1.5 times more return on investment than HIVE Blockchain. However, Iris Energy is 1.5 times more volatile than HIVE Blockchain Technologies. It trades about -0.08 of its potential returns per unit of risk. HIVE Blockchain Technologies is currently generating about -0.19 per unit of risk. If you would invest  1,071  in Iris Energy on December 27, 2024 and sell it today you would lose (400.00) from holding Iris Energy or give up 37.35% of portfolio value over 90 days.

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

Iris Energy  vs.  HIVE Blockchain Technologies

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.

HIVE Blockchain Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days HIVE Blockchain Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Iris Energy and HIVE Blockchain

The main advantage of trading using opposite Iris Energy and HIVE Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iris Energy position performs unexpectedly, HIVE Blockchain 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 HIVE Blockchain will offset losses from the drop in HIVE Blockchain's long position.

The idea behind Iris Energy and HIVE Blockchain Technologies 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.