Correlation Between Cathedra Bitcoin and Bitfarms
Can any of the company-specific risk be diversified away by investing in both Cathedra Bitcoin and Bitfarms 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 Cathedra Bitcoin and Bitfarms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathedra Bitcoin and Bitfarms, you can compare the effects of market volatilities on Cathedra Bitcoin and Bitfarms 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 Cathedra Bitcoin with a short position of Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathedra Bitcoin and Bitfarms.
Diversification Opportunities for Cathedra Bitcoin and Bitfarms
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cathedra and Bitfarms is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cathedra Bitcoin and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and Cathedra Bitcoin 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 Cathedra Bitcoin are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Cathedra Bitcoin i.e., Cathedra Bitcoin and Bitfarms go up and down completely randomly.
Pair Corralation between Cathedra Bitcoin and Bitfarms
Assuming the 90 days horizon Cathedra Bitcoin is expected to under-perform the Bitfarms. But the otc stock apears to be less risky and, when comparing its historical volatility, Cathedra Bitcoin is 1.5 times less risky than Bitfarms. The otc stock trades about -0.13 of its potential returns per unit of risk. The Bitfarms is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 225.00 in Bitfarms on August 30, 2024 and sell it today you would lose (10.00) from holding Bitfarms or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathedra Bitcoin vs. Bitfarms
Performance |
| Timeline |
| Cathedra Bitcoin |
| Bitfarms |
Cathedra Bitcoin and Bitfarms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathedra Bitcoin and Bitfarms
The main advantage of trading using opposite Cathedra Bitcoin and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathedra Bitcoin position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.| Cathedra Bitcoin vs. Arcane Crypto AB | Cathedra Bitcoin vs. Cypherpunk Holdings | Cathedra Bitcoin vs. CreditRiskMonitorCom | Cathedra Bitcoin vs. SPENN Technology AS |
| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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