Correlation Between Cipher Mining and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Cipher Mining and BitFrontier Capital 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 BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipher Mining and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Cipher Mining and BitFrontier Capital 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 BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipher Mining and BitFrontier Capital.
Diversification Opportunities for Cipher Mining and BitFrontier Capital
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cipher and BitFrontier is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Mining and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital 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 BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Cipher Mining i.e., Cipher Mining and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Cipher Mining and BitFrontier Capital
Given the investment horizon of 90 days Cipher Mining is expected to generate 0.67 times more return on investment than BitFrontier Capital. However, Cipher Mining is 1.49 times less risky than BitFrontier Capital. It trades about 0.09 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.03 per unit of risk. If you would invest 78.00 in Cipher Mining on August 30, 2024 and sell it today you would earn a total of 567.00 from holding Cipher Mining or generate 726.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cipher Mining vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Cipher Mining |
| BitFrontier Capital |
Cipher Mining and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cipher Mining and BitFrontier Capital
The main advantage of trading using opposite Cipher Mining and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipher Mining position performs unexpectedly, BitFrontier Capital 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining vs. Bitfarms |
| BitFrontier Capital vs. XTRA Bitcoin | BitFrontier Capital vs. Coin Citadel | BitFrontier Capital vs. Dmg Blockchain Solutions | BitFrontier Capital vs. Argo Blockchain PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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