Correlation Between Hut 8 and BGC
Can any of the company-specific risk be diversified away by investing in both Hut 8 and BGC 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 Hut 8 and BGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hut 8 Corp and BGC Group, you can compare the effects of market volatilities on Hut 8 and BGC 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 Hut 8 with a short position of BGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and BGC.
Diversification Opportunities for Hut 8 and BGC
Poor diversification
The 3 months correlation between Hut and BGC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group and Hut 8 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 Hut 8 Corp are associated (or correlated) with BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Hut 8 i.e., Hut 8 and BGC go up and down completely randomly.
Pair Corralation between Hut 8 and BGC
Considering the 90-day investment horizon Hut 8 Corp is expected to generate 2.91 times more return on investment than BGC. However, Hut 8 is 2.91 times more volatile than BGC Group. It trades about 0.28 of its potential returns per unit of risk. BGC Group is currently generating about 0.18 per unit of risk. If you would invest 1,511 in Hut 8 Corp on August 24, 2024 and sell it today you would earn a total of 837.00 from holding Hut 8 Corp or generate 55.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hut 8 Corp vs. BGC Group
Performance |
| Timeline |
| Hut 8 Corp |
| BGC Group |
Hut 8 and BGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hut 8 and BGC
The main advantage of trading using opposite Hut 8 and BGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 position performs unexpectedly, BGC 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 BGC will offset losses from the drop in BGC's long position.The idea behind Hut 8 Corp and BGC Group 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.| BGC vs. Cumberland Pharmaceuticals | BGC vs. Chester Mining | BGC vs. Electrovaya Common Shares | BGC vs. Teleflex Incorporated |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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