Correlation Between Cipher Mining and Armada Mercantile
Can any of the company-specific risk be diversified away by investing in both Cipher Mining and Armada Mercantile 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 Cipher Mining and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipher Mining and Armada Mercantile, you can compare the effects of market volatilities on Cipher Mining and Armada Mercantile 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 Cipher Mining with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipher Mining and Armada Mercantile.
Diversification Opportunities for Cipher Mining and Armada Mercantile
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cipher and Armada is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Mining and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and Cipher Mining 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 Cipher Mining are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of Cipher Mining i.e., Cipher Mining and Armada Mercantile go up and down completely randomly.
Pair Corralation between Cipher Mining and Armada Mercantile
Given the investment horizon of 90 days Cipher Mining is expected to under-perform the Armada Mercantile. But the stock apears to be less risky and, when comparing its historical volatility, Cipher Mining is 2.04 times less risky than Armada Mercantile. The stock trades about -0.06 of its potential returns per unit of risk. The Armada Mercantile is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Armada Mercantile on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Armada Mercantile or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cipher Mining vs. Armada Mercantile
Performance |
| Timeline |
| Cipher Mining |
| Armada Mercantile |
Cipher Mining and Armada Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cipher Mining and Armada Mercantile
The main advantage of trading using opposite Cipher Mining and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipher Mining position performs unexpectedly, Armada Mercantile 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 Armada Mercantile will offset losses from the drop in Armada Mercantile's long position.| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining vs. Bitfarms |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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