Correlation Between DeFi Technologies and Stronghold Digital
Can any of the company-specific risk be diversified away by investing in both DeFi Technologies and Stronghold 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 DeFi Technologies and Stronghold Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeFi Technologies and Stronghold Digital Mining, you can compare the effects of market volatilities on DeFi Technologies and Stronghold 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 DeFi Technologies with a short position of Stronghold Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeFi Technologies and Stronghold Digital.
Diversification Opportunities for DeFi Technologies and Stronghold Digital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between DeFi and Stronghold is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding DeFi Technologies and Stronghold Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stronghold Digital Mining and DeFi Technologies 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 DeFi Technologies are associated (or correlated) with Stronghold Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stronghold Digital Mining has no effect on the direction of DeFi Technologies i.e., DeFi Technologies and Stronghold Digital go up and down completely randomly.
Pair Corralation between DeFi Technologies and Stronghold Digital
Assuming the 90 days horizon DeFi Technologies is expected to generate 0.77 times more return on investment than Stronghold Digital. However, DeFi Technologies is 1.29 times less risky than Stronghold Digital. It trades about 0.13 of its potential returns per unit of risk. Stronghold Digital Mining is currently generating about 0.09 per unit of risk. If you would invest 96.00 in DeFi Technologies on September 1, 2024 and sell it today you would earn a total of 152.00 from holding DeFi Technologies or generate 158.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeFi Technologies vs. Stronghold Digital Mining
Performance |
| Timeline |
| DeFi Technologies |
| Stronghold Digital Mining |
DeFi Technologies and Stronghold Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeFi Technologies and Stronghold Digital
The main advantage of trading using opposite DeFi Technologies and Stronghold Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeFi Technologies position performs unexpectedly, Stronghold 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 Stronghold Digital will offset losses from the drop in Stronghold Digital's long position.| DeFi Technologies vs. Argo Blockchain PLC | DeFi Technologies vs. DigiMax Global | DeFi Technologies vs. Galaxy Digital Holdings | DeFi Technologies vs. BIG Blockchain Intelligence |
| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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