Correlation Between Bitfarms and Digihost Technology
Can any of the company-specific risk be diversified away by investing in both Bitfarms and Digihost Technology 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 Digihost Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Digihost Technology, you can compare the effects of market volatilities on Bitfarms and Digihost Technology 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 Digihost Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Digihost Technology.
Diversification Opportunities for Bitfarms and Digihost Technology
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bitfarms and Digihost is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology 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 Digihost Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digihost Technology has no effect on the direction of Bitfarms i.e., Bitfarms and Digihost Technology go up and down completely randomly.
Pair Corralation between Bitfarms and Digihost Technology
Given the investment horizon of 90 days Bitfarms is expected to generate 15.02 times less return on investment than Digihost Technology. In addition to that, Bitfarms is 1.05 times more volatile than Digihost Technology. It trades about 0.02 of its total potential returns per unit of risk. Digihost Technology is currently generating about 0.25 per unit of volatility. If you would invest 156.00 in Digihost Technology on August 25, 2024 and sell it today you would earn a total of 130.00 from holding Digihost Technology or generate 83.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Bitfarms vs. Digihost Technology
Performance |
| Timeline |
| Bitfarms |
| Digihost Technology |
Bitfarms and Digihost Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Digihost Technology
The main advantage of trading using opposite Bitfarms and Digihost Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, Digihost Technology 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 Digihost Technology will offset losses from the drop in Digihost Technology's long position.| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
| Digihost Technology vs. Neptune Digital Assets | Digihost Technology vs. Dmg Blockchain Solutions | Digihost Technology vs. CryptoStar 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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