Correlation Between Iris Energy and Yotta Acquisition

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

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

Diversification Opportunities for Iris Energy and Yotta Acquisition

0.16

Correlation Coefficient

Iris Energy  Yotta Acquisition

Average diversification

The 3 months correlation between Iris and Yotta is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Iris Energy and Yotta Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition 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 Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition has no effect on the direction of Iris Energy i.e., Iris Energy and Yotta Acquisition go up and down completely randomly.

Pair Corralation between Iris Energy and Yotta Acquisition

Given the investment horizon of 90 days Iris Energy is expected to under-perform the Yotta Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Iris Energy is 3.18 times less risky than Yotta Acquisition. The stock trades about -0.09 of its potential returns per unit of risk. The Yotta Acquisition is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5.80  in Yotta Acquisition on December 20, 2024 and sell it today you would lose (1.47) from holding Yotta Acquisition or give up 25.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	68.33%
Values	Daily Returns

Iris Energy  vs.  Yotta Acquisition

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 unfluctuating 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.

Yotta Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yotta Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yotta Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iris Energy and Yotta Acquisition

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

The idea behind Iris Energy and Yotta Acquisition 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.