Correlation Between Iris Energy and Raymond James

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

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

Diversification Opportunities for Iris Energy and Raymond James

0.87

Correlation Coefficient

Iris Energy  Raymond James

Very poor diversification

The 3 months correlation between Iris and Raymond is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Iris Energy and Raymond James Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raymond James Financial 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 Raymond James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raymond James Financial has no effect on the direction of Iris Energy i.e., Iris Energy and Raymond James go up and down completely randomly.

Pair Corralation between Iris Energy and Raymond James

Given the investment horizon of 90 days Iris Energy is expected to generate 4.73 times more return on investment than Raymond James. However, Iris Energy is 4.73 times more volatile than Raymond James Financial. It trades about 0.1 of its potential returns per unit of risk. Raymond James Financial is currently generating about 0.12 per unit of risk. If you would invest  406.00  in Iris Energy on August 22, 2024 and sell it today you would earn a total of  635.00  from holding Iris Energy or generate 156.4% return on investment over 90 days.

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

Iris Energy  vs.  Raymond James Financial

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 inconsistent technical and fundamental indicators, Iris Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Raymond James Financial

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward-looking indicators, Raymond James reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iris Energy and Raymond James

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

The idea behind Iris Energy and Raymond James Financial 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.