Correlation Between Stronghold Digital and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both Stronghold Digital and Argo Blockchain 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 Stronghold Digital and Argo Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stronghold Digital Mining and Argo Blockchain PLC, you can compare the effects of market volatilities on Stronghold Digital and Argo Blockchain 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 Stronghold Digital with a short position of Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and Argo Blockchain.
Diversification Opportunities for Stronghold Digital and Argo Blockchain
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stronghold and Argo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC and Stronghold Digital 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 Stronghold Digital Mining are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and Argo Blockchain go up and down completely randomly.
Pair Corralation between Stronghold Digital and Argo Blockchain
Given the investment horizon of 90 days Stronghold Digital Mining is expected to generate 1.01 times more return on investment than Argo Blockchain. However, Stronghold Digital is 1.01 times more volatile than Argo Blockchain PLC. It trades about -0.05 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about -0.13 per unit of risk. If you would invest 386.00 in Stronghold Digital Mining on November 3, 2024 and sell it today you would lose (28.00) from holding Stronghold Digital Mining or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stronghold Digital Mining vs. Argo Blockchain PLC
Performance |
| Timeline |
| Stronghold Digital Mining |
| Argo Blockchain PLC |
Stronghold Digital and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stronghold Digital and Argo Blockchain
The main advantage of trading using opposite Stronghold Digital and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stronghold Digital position performs unexpectedly, Argo Blockchain 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 Argo Blockchain will offset losses from the drop in Argo Blockchain's long position.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
| Argo Blockchain vs. Terawulf | Argo Blockchain vs. Iris Energy | Argo Blockchain vs. Stronghold Digital Mining | Argo Blockchain vs. Bitfarms |
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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