Correlation Between Applied Blockchain and Bitfarms
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and Bitfarms 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 Applied Blockchain and Bitfarms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and Bitfarms, you can compare the effects of market volatilities on Applied Blockchain and Bitfarms 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 Applied Blockchain with a short position of Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Bitfarms.
Diversification Opportunities for Applied Blockchain and Bitfarms
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Bitfarms is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Bitfarms go up and down completely randomly.
Pair Corralation between Applied Blockchain and Bitfarms
Given the investment horizon of 90 days Applied Blockchain is expected to generate 0.84 times more return on investment than Bitfarms. However, Applied Blockchain is 1.2 times less risky than Bitfarms. It trades about 0.1 of its potential returns per unit of risk. Bitfarms is currently generating about 0.07 per unit of risk. If you would invest 861.00 in Applied Blockchain on August 24, 2024 and sell it today you would earn a total of 100.00 from holding Applied Blockchain or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Blockchain vs. Bitfarms
Performance |
| Timeline |
| Applied Blockchain |
| Bitfarms |
Applied Blockchain and Bitfarms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and Bitfarms
The main advantage of trading using opposite Applied Blockchain and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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