Correlation Between Bitfarms and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both Bitfarms and Argo Blockchain 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 Argo Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Argo Blockchain PLC, you can compare the effects of market volatilities on Bitfarms and Argo Blockchain 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 Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Argo Blockchain.
Diversification Opportunities for Bitfarms and Argo Blockchain
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitfarms and Argo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC 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 Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of Bitfarms i.e., Bitfarms and Argo Blockchain go up and down completely randomly.
Pair Corralation between Bitfarms and Argo Blockchain
Given the investment horizon of 90 days Bitfarms is expected to generate 0.78 times more return on investment than Argo Blockchain. However, Bitfarms is 1.28 times less risky than Argo Blockchain. It trades about 0.02 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about 0.0 per unit of risk. If you would invest 233.00 in Bitfarms on August 28, 2024 and sell it today you would lose (28.00) from holding Bitfarms or give up 12.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Argo Blockchain PLC
Performance |
| Timeline |
| Bitfarms |
| Argo Blockchain PLC |
Bitfarms and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Argo Blockchain
The main advantage of trading using opposite Bitfarms and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, Argo Blockchain 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 Argo Blockchain will offset losses from the drop in Argo Blockchain's long position.| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
| Argo Blockchain vs. Terawulf | Argo Blockchain vs. Iris Energy | Argo Blockchain vs. Stronghold Digital Mining | Argo Blockchain vs. Bitfarms |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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