Correlation Between Bit Digital and Riot Blockchain
Can any of the company-specific risk be diversified away by investing in both Bit Digital and Riot 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 Bit Digital and Riot Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bit Digital and Riot Blockchain, you can compare the effects of market volatilities on Bit Digital and Riot 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 Bit Digital with a short position of Riot Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bit Digital and Riot Blockchain.
Diversification Opportunities for Bit Digital and Riot Blockchain
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bit and Riot is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bit Digital and Riot Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riot Blockchain and Bit Digital 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 Bit Digital are associated (or correlated) with Riot Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riot Blockchain has no effect on the direction of Bit Digital i.e., Bit Digital and Riot Blockchain go up and down completely randomly.
Pair Corralation between Bit Digital and Riot Blockchain
Given the investment horizon of 90 days Bit Digital is expected to generate 3.09 times less return on investment than Riot Blockchain. In addition to that, Bit Digital is 1.07 times more volatile than Riot Blockchain. It trades about 0.03 of its total potential returns per unit of risk. Riot Blockchain is currently generating about 0.11 per unit of volatility. If you would invest 1,056 in Riot Blockchain on August 28, 2024 and sell it today you would earn a total of 150.00 from holding Riot Blockchain or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bit Digital vs. Riot Blockchain
Performance |
| Timeline |
| Bit Digital |
| Riot Blockchain |
Bit Digital and Riot Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bit Digital and Riot Blockchain
The main advantage of trading using opposite Bit Digital and Riot Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bit Digital position performs unexpectedly, Riot 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 Riot Blockchain will offset losses from the drop in Riot Blockchain's long position.| Bit Digital vs. Scully Royalty | Bit Digital vs. Donnelley Financial Solutions | Bit Digital vs. Heritage Global | Bit Digital vs. Oppenheimer Holdings |
| Riot Blockchain vs. Hut 8 Corp | Riot Blockchain vs. CleanSpark | Riot Blockchain vs. Bit Digital | Riot 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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