Correlation Between Stronghold Digital and Bitfarms
Can any of the company-specific risk be diversified away by investing in both Stronghold Digital 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 Stronghold Digital and Bitfarms 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 Bitfarms, you can compare the effects of market volatilities on Stronghold Digital 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 Stronghold Digital with a short position of Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and Bitfarms.
Diversification Opportunities for Stronghold Digital and Bitfarms
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stronghold and Bitfarms is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms 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 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 Stronghold Digital i.e., Stronghold Digital and Bitfarms go up and down completely randomly.
Pair Corralation between Stronghold Digital and Bitfarms
Given the investment horizon of 90 days Stronghold Digital is expected to generate 1.5 times less return on investment than Bitfarms. In addition to that, Stronghold Digital is 1.31 times more volatile than Bitfarms. It trades about 0.04 of its total potential returns per unit of risk. Bitfarms is currently generating about 0.08 per unit of volatility. If you would invest 49.00 in Bitfarms on August 28, 2024 and sell it today you would earn a total of 156.00 from holding Bitfarms or generate 318.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stronghold Digital Mining vs. Bitfarms
Performance |
| Timeline |
| Stronghold Digital Mining |
| Bitfarms |
Stronghold Digital and Bitfarms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stronghold Digital and Bitfarms
The main advantage of trading using opposite Stronghold Digital and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stronghold Digital 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.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
| Bitfarms vs. PowerUp Acquisition Corp | Bitfarms vs. Aurora Innovation | Bitfarms vs. HUMANA INC | Bitfarms vs. Aquagold International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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