Correlation Between Hut 8 and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Hut 8 and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Hut 8 and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Jefferies Financial.
Diversification Opportunities for Hut 8 and Jefferies Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hut and Jefferies is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Hut 8 i.e., Hut 8 and Jefferies Financial go up and down completely randomly.
Pair Corralation between Hut 8 and Jefferies Financial
Considering the 90-day investment horizon Hut 8 Corp is expected to generate 3.72 times more return on investment than Jefferies Financial. However, Hut 8 is 3.72 times more volatile than Jefferies Financial Group. It trades about 0.08 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.12 per unit of risk. If you would invest 500.00 in Hut 8 Corp on August 30, 2024 and sell it today you would earn a total of 2,345 from holding Hut 8 Corp or generate 469.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hut 8 Corp vs. Jefferies Financial Group
Performance |
| Timeline |
| Hut 8 Corp |
| Jefferies Financial |
Hut 8 and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hut 8 and Jefferies Financial
The main advantage of trading using opposite Hut 8 and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.The idea behind Hut 8 Corp and Jefferies Financial 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.| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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