Correlation Between Applied Blockchain and Hut 8
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and Hut 8 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 Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and Hut 8 Corp, you can compare the effects of market volatilities on Applied Blockchain and Hut 8 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 Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Hut 8.
Diversification Opportunities for Applied Blockchain and Hut 8
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Applied and Hut is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Hut 8 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hut 8 Corp 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 Hut 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hut 8 Corp has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Hut 8 go up and down completely randomly.
Pair Corralation between Applied Blockchain and Hut 8
Given the investment horizon of 90 days Applied Blockchain is expected to generate 1.53 times less return on investment than Hut 8. But when comparing it to its historical volatility, Applied Blockchain is 1.1 times less risky than Hut 8. It trades about 0.19 of its potential returns per unit of risk. Hut 8 Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,721 in Hut 8 Corp on August 28, 2024 and sell it today you would earn a total of 803.00 from holding Hut 8 Corp or generate 46.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Blockchain vs. Hut 8 Corp
Performance |
| Timeline |
| Applied Blockchain |
| Hut 8 Corp |
Applied Blockchain and Hut 8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and Hut 8
The main advantage of trading using opposite Applied Blockchain and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, Hut 8 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 Hut 8 will offset losses from the drop in Hut 8's long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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