Correlation Between CF Acquisition and Cipher Mining
Can any of the company-specific risk be diversified away by investing in both CF Acquisition and Cipher Mining 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 CF Acquisition and Cipher Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition VII and Cipher Mining, you can compare the effects of market volatilities on CF Acquisition and Cipher Mining 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 CF Acquisition with a short position of Cipher Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and Cipher Mining.
Diversification Opportunities for CF Acquisition and Cipher Mining
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFFS and Cipher is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition VII and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining and CF Acquisition 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 CF Acquisition VII are associated (or correlated) with Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of CF Acquisition i.e., CF Acquisition and Cipher Mining go up and down completely randomly.
Pair Corralation between CF Acquisition and Cipher Mining
Given the investment horizon of 90 days CF Acquisition is expected to generate 28.28 times less return on investment than Cipher Mining. But when comparing it to its historical volatility, CF Acquisition VII is 30.41 times less risky than Cipher Mining. It trades about 0.08 of its potential returns per unit of risk. Cipher Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Cipher Mining on September 2, 2024 and sell it today you would earn a total of 428.00 from holding Cipher Mining or generate 176.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Acquisition VII vs. Cipher Mining
Performance |
| Timeline |
| CF Acquisition VII |
| Cipher Mining |
CF Acquisition and Cipher Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and Cipher Mining
The main advantage of trading using opposite CF Acquisition and Cipher Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition position performs unexpectedly, Cipher Mining 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 Cipher Mining will offset losses from the drop in Cipher Mining's long position.The idea behind CF Acquisition VII and Cipher Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |