Correlation Between Cipher Mining and Bit Digital
Can any of the company-specific risk be diversified away by investing in both Cipher Mining and Bit Digital 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 Bit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipher Mining and Bit Digital, you can compare the effects of market volatilities on Cipher Mining and Bit Digital 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 Bit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipher Mining and Bit Digital.
Diversification Opportunities for Cipher Mining and Bit Digital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cipher and Bit is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Mining and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital 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 Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of Cipher Mining i.e., Cipher Mining and Bit Digital go up and down completely randomly.
Pair Corralation between Cipher Mining and Bit Digital
Given the investment horizon of 90 days Cipher Mining is expected to generate 0.89 times more return on investment than Bit Digital. However, Cipher Mining is 1.13 times less risky than Bit Digital. It trades about 0.11 of its potential returns per unit of risk. Bit Digital is currently generating about 0.03 per unit of risk. If you would invest 566.00 in Cipher Mining on August 28, 2024 and sell it today you would earn a total of 79.00 from holding Cipher Mining or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cipher Mining vs. Bit Digital
Performance |
| Timeline |
| Cipher Mining |
| Bit Digital |
Cipher Mining and Bit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cipher Mining and Bit Digital
The main advantage of trading using opposite Cipher Mining and Bit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipher Mining position performs unexpectedly, Bit Digital 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 Bit Digital will offset losses from the drop in Bit Digital's long position.| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining vs. Bitfarms |
| Bit Digital vs. Hut 8 Corp | Bit Digital vs. HIVE Blockchain Technologies | Bit Digital vs. CleanSpark | Bit Digital vs. Terawulf |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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