Correlation Between Hut 8 and Mercurity Fintech
Can any of the company-specific risk be diversified away by investing in both Hut 8 and Mercurity Fintech 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 Mercurity Fintech 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 Mercurity Fintech Holding, you can compare the effects of market volatilities on Hut 8 and Mercurity Fintech 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 Mercurity Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Mercurity Fintech.
Diversification Opportunities for Hut 8 and Mercurity Fintech
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hut and Mercurity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding 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 Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of Hut 8 i.e., Hut 8 and Mercurity Fintech go up and down completely randomly.
Pair Corralation between Hut 8 and Mercurity Fintech
Considering the 90-day investment horizon Hut 8 is expected to generate 1.97 times less return on investment than Mercurity Fintech. But when comparing it to its historical volatility, Hut 8 Corp is 1.5 times less risky than Mercurity Fintech. It trades about 0.06 of its potential returns per unit of risk. Mercurity Fintech Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Mercurity Fintech Holding on August 27, 2024 and sell it today you would earn a total of 385.00 from holding Mercurity Fintech Holding or generate 337.72% 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. Mercurity Fintech Holding
Performance |
| Timeline |
| Hut 8 Corp |
| Mercurity Fintech Holding |
Hut 8 and Mercurity Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hut 8 and Mercurity Fintech
The main advantage of trading using opposite Hut 8 and Mercurity Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 position performs unexpectedly, Mercurity Fintech 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 Mercurity Fintech will offset losses from the drop in Mercurity Fintech's long position.The idea behind Hut 8 Corp and Mercurity Fintech Holding 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.| Mercurity Fintech vs. Scully Royalty | Mercurity Fintech vs. Donnelley Financial Solutions | Mercurity Fintech vs. Heritage Global | Mercurity Fintech vs. Oppenheimer Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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