Correlation Between Bitfarms and Greenidge Generation
Can any of the company-specific risk be diversified away by investing in both Bitfarms and Greenidge Generation 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 Greenidge Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Greenidge Generation Holdings, you can compare the effects of market volatilities on Bitfarms and Greenidge Generation 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 Greenidge Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Greenidge Generation.
Diversification Opportunities for Bitfarms and Greenidge Generation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitfarms and Greenidge is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Bitfarms i.e., Bitfarms and Greenidge Generation go up and down completely randomly.
Pair Corralation between Bitfarms and Greenidge Generation
Given the investment horizon of 90 days Bitfarms is expected to generate 1.73 times less return on investment than Greenidge Generation. But when comparing it to its historical volatility, Bitfarms is 1.21 times less risky than Greenidge Generation. It trades about 0.09 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Greenidge Generation Holdings on October 23, 2024 and sell it today you would earn a total of 18.00 from holding Greenidge Generation Holdings or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Greenidge Generation Holdings
Performance |
| Timeline |
| Bitfarms |
| Greenidge Generation |
Bitfarms and Greenidge Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Greenidge Generation
The main advantage of trading using opposite Bitfarms and Greenidge Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, Greenidge Generation 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 Greenidge Generation will offset losses from the drop in Greenidge Generation's long position.| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
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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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