Correlation Between Bitfarms and Hut 8
Can any of the company-specific risk be diversified away by investing in both Bitfarms 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 Bitfarms and Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Hut 8 Mining, you can compare the effects of market volatilities on Bitfarms 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 Bitfarms with a short position of Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Hut 8.
Diversification Opportunities for Bitfarms and Hut 8
Very weak diversification
The 3 months correlation between Bitfarms and Hut is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Hut 8 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hut 8 Mining 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 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 Mining has no effect on the direction of Bitfarms i.e., Bitfarms and Hut 8 go up and down completely randomly.
Pair Corralation between Bitfarms and Hut 8
Given the investment horizon of 90 days Bitfarms is expected to generate 4.66 times less return on investment than Hut 8. In addition to that, Bitfarms is 1.01 times more volatile than Hut 8 Mining. It trades about 0.07 of its total potential returns per unit of risk. Hut 8 Mining is currently generating about 0.33 per unit of volatility. If you would invest 2,121 in Hut 8 Mining on August 25, 2024 and sell it today you would earn a total of 1,503 from holding Hut 8 Mining or generate 70.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Hut 8 Mining
Performance |
| Timeline |
| Bitfarms |
| Hut 8 Mining |
Bitfarms and Hut 8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Hut 8
The main advantage of trading using opposite Bitfarms and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms 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.| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
| Hut 8 vs. HIVE Blockchain Technologies | Hut 8 vs. Dmg Blockchain Solutions | Hut 8 vs. Galaxy Digital Holdings | Hut 8 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |