Correlation Between Bitfarms and SATO Technologies
Can any of the company-specific risk be diversified away by investing in both Bitfarms and SATO Technologies 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 Bitfarms and SATO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and SATO Technologies Corp, you can compare the effects of market volatilities on Bitfarms and SATO Technologies 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 Bitfarms with a short position of SATO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and SATO Technologies.
Diversification Opportunities for Bitfarms and SATO Technologies
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitfarms and SATO is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and SATO Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SATO Technologies Corp and Bitfarms 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 Bitfarms are associated (or correlated) with SATO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SATO Technologies Corp has no effect on the direction of Bitfarms i.e., Bitfarms and SATO Technologies go up and down completely randomly.
Pair Corralation between Bitfarms and SATO Technologies
Assuming the 90 days trading horizon Bitfarms is expected to generate 0.91 times more return on investment than SATO Technologies. However, Bitfarms is 1.09 times less risky than SATO Technologies. It trades about 0.06 of its potential returns per unit of risk. SATO Technologies Corp is currently generating about 0.01 per unit of risk. If you would invest 153.00 in Bitfarms on August 31, 2024 and sell it today you would earn a total of 157.00 from holding Bitfarms or generate 102.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. SATO Technologies Corp
Performance |
| Timeline |
| Bitfarms |
| SATO Technologies Corp |
Bitfarms and SATO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and SATO Technologies
The main advantage of trading using opposite Bitfarms and SATO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, SATO Technologies 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 SATO Technologies will offset losses from the drop in SATO Technologies' long position.| Bitfarms vs. Hut 8 Mining | Bitfarms vs. Bitfarms | Bitfarms vs. Dmg Blockchain Solutions | Bitfarms vs. Galaxy Digital Holdings |
| SATO Technologies vs. Advent Wireless | SATO Technologies vs. Evertz Technologies Limited | SATO Technologies vs. Oculus VisionTech | SATO Technologies vs. Arbor Metals Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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