Correlation Between Bitfarms and Netcapital
Can any of the company-specific risk be diversified away by investing in both Bitfarms and Netcapital 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 Netcapital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Netcapital, you can compare the effects of market volatilities on Bitfarms and Netcapital 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 Netcapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Netcapital.
Diversification Opportunities for Bitfarms and Netcapital
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bitfarms and Netcapital is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Netcapital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcapital 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 Netcapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcapital has no effect on the direction of Bitfarms i.e., Bitfarms and Netcapital go up and down completely randomly.
Pair Corralation between Bitfarms and Netcapital
Given the investment horizon of 90 days Bitfarms is expected to generate 1.22 times less return on investment than Netcapital. In addition to that, Bitfarms is 1.93 times more volatile than Netcapital. It trades about 0.07 of its total potential returns per unit of risk. Netcapital is currently generating about 0.18 per unit of volatility. If you would invest 159.00 in Netcapital on August 24, 2024 and sell it today you would earn a total of 26.00 from holding Netcapital or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Netcapital
Performance |
| Timeline |
| Bitfarms |
| Netcapital |
Bitfarms and Netcapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Netcapital
The main advantage of trading using opposite Bitfarms and Netcapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, Netcapital 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 Netcapital will offset losses from the drop in Netcapital's long position.| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
| Netcapital vs. Applied Blockchain | Netcapital vs. Zhong Yang Financial | Netcapital vs. Magic Empire Global | Netcapital vs. Lazard |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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