Correlation Between SATO Technologies and Bitfarms
Can any of the company-specific risk be diversified away by investing in both SATO Technologies and Bitfarms 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 SATO Technologies and Bitfarms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SATO Technologies Corp and Bitfarms, you can compare the effects of market volatilities on SATO Technologies and Bitfarms 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 SATO Technologies with a short position of Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of SATO Technologies and Bitfarms.
Diversification Opportunities for SATO Technologies and Bitfarms
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SATO and Bitfarms is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SATO Technologies Corp and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and SATO Technologies 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 SATO Technologies Corp are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of SATO Technologies i.e., SATO Technologies and Bitfarms go up and down completely randomly.
Pair Corralation between SATO Technologies and Bitfarms
Assuming the 90 days trading horizon SATO Technologies Corp is expected to under-perform the Bitfarms. In addition to that, SATO Technologies is 1.14 times more volatile than Bitfarms. It trades about -0.02 of its total potential returns per unit of risk. Bitfarms is currently generating about 0.03 per unit of volatility. If you would invest 292.00 in Bitfarms on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Bitfarms or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SATO Technologies Corp vs. Bitfarms
Performance |
| Timeline |
| SATO Technologies Corp |
| Bitfarms |
SATO Technologies and Bitfarms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SATO Technologies and Bitfarms
The main advantage of trading using opposite SATO Technologies and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SATO Technologies position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.| SATO Technologies vs. TGS Esports | SATO Technologies vs. Quorum Information Technologies | SATO Technologies vs. Altair Resources | SATO Technologies vs. Doman Building Materials |
| Bitfarms vs. Hut 8 Mining | Bitfarms vs. Bitfarms | Bitfarms vs. Dmg Blockchain Solutions | Bitfarms vs. Galaxy Digital 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| CEOs Directory Screen CEOs from public companies around the world |