Correlation Between Iris Energy and Greenidge Generation

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

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

Diversification Opportunities for Iris Energy and Greenidge Generation

0.34

Correlation Coefficient

Iris Energy  Greenidge Generation

Weak diversification

The 3 months correlation between Iris and Greenidge is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Iris Energy and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Iris Energy i.e., Iris Energy and Greenidge Generation go up and down completely randomly.

Pair Corralation between Iris Energy and Greenidge Generation

Given the investment horizon of 90 days Iris Energy is expected to generate 1.23 times more return on investment than Greenidge Generation. However, Iris Energy is 1.23 times more volatile than Greenidge Generation Holdings. It trades about 0.09 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about 0.0 per unit of risk. If you would invest  885.00  in Iris Energy on September 27, 2024 and sell it today you would earn a total of  250.00  from holding Iris Energy or generate 28.25% return on investment over 90 days.

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

Iris Energy  vs.  Greenidge Generation Holdings

Iris Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Iris Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Iris Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Greenidge Generation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenidge Generation Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Greenidge Generation is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Iris Energy and Greenidge Generation

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

The idea behind Iris Energy and Greenidge Generation Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..