Correlation Between Kuya Silver and Iris Energy

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

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

Diversification Opportunities for Kuya Silver and Iris Energy

-0.54

Correlation Coefficient

Kuya Silver  Iris Energy

Excellent diversification

The 3 months correlation between Kuya and Iris is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kuya Silver and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy and Kuya Silver 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 Kuya Silver 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 Kuya Silver i.e., Kuya Silver and Iris Energy go up and down completely randomly.

Pair Corralation between Kuya Silver and Iris Energy

Assuming the 90 days horizon Kuya Silver is expected to generate 0.64 times more return on investment than Iris Energy. However, Kuya Silver is 1.55 times less risky than Iris Energy. It trades about 0.21 of its potential returns per unit of risk. Iris Energy is currently generating about 0.09 per unit of risk. If you would invest  17.00  in Kuya Silver on October 24, 2024 and sell it today you would earn a total of  2.00  from holding Kuya Silver or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kuya Silver  vs.  Iris Energy

Kuya Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuya Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Iris Energy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iris Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Iris Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kuya Silver and Iris Energy

The main advantage of trading using opposite Kuya Silver and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuya Silver 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 Kuya Silver 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.