Correlation Between Hut 8 and Greenidge Generation
Can any of the company-specific risk be diversified away by investing in both Hut 8 and Greenidge Generation 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 Greenidge Generation 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 Greenidge Generation Holdings, you can compare the effects of market volatilities on Hut 8 and Greenidge Generation 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 Greenidge Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Greenidge Generation.
Diversification Opportunities for Hut 8 and Greenidge Generation
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hut and Greenidge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Hut 8 i.e., Hut 8 and Greenidge Generation go up and down completely randomly.
Pair Corralation between Hut 8 and Greenidge Generation
Considering the 90-day investment horizon Hut 8 Corp is expected to generate 0.74 times more return on investment than Greenidge Generation. However, Hut 8 Corp is 1.35 times less risky than Greenidge Generation. It trades about 0.08 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about 0.02 per unit of risk. If you would invest 570.00 in Hut 8 Corp on August 24, 2024 and sell it today you would earn a total of 2,022 from holding Hut 8 Corp or generate 354.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hut 8 Corp vs. Greenidge Generation Holdings
Performance |
| Timeline |
| Hut 8 Corp |
| Greenidge Generation |
Hut 8 and Greenidge Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hut 8 and Greenidge Generation
The main advantage of trading using opposite Hut 8 and Greenidge Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 position performs unexpectedly, Greenidge Generation 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 Greenidge Generation will offset losses from the drop in Greenidge Generation's long position.The idea behind Hut 8 Corp and Greenidge Generation Holdings 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.| Greenidge Generation vs. Unity Software | Greenidge Generation vs. Daily Journal Corp | Greenidge Generation vs. C3 Ai Inc | Greenidge Generation vs. Blackline |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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