Correlation Between Riot Blockchain and Affirm Holdings
Can any of the company-specific risk be diversified away by investing in both Riot Blockchain and Affirm Holdings 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 Riot Blockchain and Affirm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riot Blockchain and Affirm Holdings, you can compare the effects of market volatilities on Riot Blockchain and Affirm Holdings 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 Riot Blockchain with a short position of Affirm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riot Blockchain and Affirm Holdings.
Diversification Opportunities for Riot Blockchain and Affirm Holdings
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Riot and Affirm is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Riot Blockchain and Affirm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affirm Holdings and Riot Blockchain 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 Riot Blockchain are associated (or correlated) with Affirm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affirm Holdings has no effect on the direction of Riot Blockchain i.e., Riot Blockchain and Affirm Holdings go up and down completely randomly.
Pair Corralation between Riot Blockchain and Affirm Holdings
Given the investment horizon of 90 days Riot Blockchain is expected to generate 1.88 times less return on investment than Affirm Holdings. In addition to that, Riot Blockchain is 1.36 times more volatile than Affirm Holdings. It trades about 0.13 of its total potential returns per unit of risk. Affirm Holdings is currently generating about 0.32 per unit of volatility. If you would invest 4,524 in Affirm Holdings on August 31, 2024 and sell it today you would earn a total of 2,313 from holding Affirm Holdings or generate 51.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Riot Blockchain vs. Affirm Holdings
Performance |
| Timeline |
| Riot Blockchain |
| Affirm Holdings |
Riot Blockchain and Affirm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riot Blockchain and Affirm Holdings
The main advantage of trading using opposite Riot Blockchain and Affirm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riot Blockchain position performs unexpectedly, Affirm Holdings 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 Affirm Holdings will offset losses from the drop in Affirm Holdings' long position.| Riot Blockchain vs. Hut 8 Corp | Riot Blockchain vs. CleanSpark | Riot Blockchain vs. Bit Digital | Riot Blockchain vs. Bitfarms |
| Affirm Holdings vs. Upstart Holdings | Affirm Holdings vs. SoFi Technologies | Affirm Holdings vs. Roblox Corp | Affirm Holdings vs. Robinhood Markets |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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