Correlation Between Chainlink and IRIS

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

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

Diversification Opportunities for Chainlink and IRIS

-0.31

Correlation Coefficient

Chainlink  IRIS

Very good diversification

The 3 months correlation between Chainlink and IRIS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and IRIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRIS and Chainlink 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 Chainlink are associated (or correlated) with IRIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRIS has no effect on the direction of Chainlink i.e., Chainlink and IRIS go up and down completely randomly.

Pair Corralation between Chainlink and IRIS

Assuming the 90 days trading horizon Chainlink is expected to generate 0.19 times more return on investment than IRIS. However, Chainlink is 5.35 times less risky than IRIS. It trades about 0.48 of its potential returns per unit of risk. IRIS is currently generating about 0.08 per unit of risk. If you would invest  1,125  in Chainlink on September 1, 2024 and sell it today you would earn a total of  691.00  from holding Chainlink or generate 61.42% return on investment over 90 days.

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

Chainlink  vs.  IRIS

Chainlink

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chainlink are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Chainlink exhibited solid returns over the last few months and may actually be approaching a breakup point.

IRIS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IRIS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, IRIS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chainlink and IRIS

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

The idea behind Chainlink and IRIS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.