Correlation Between Stronghold Digital and Cipher Mining
Can any of the company-specific risk be diversified away by investing in both Stronghold Digital and Cipher Mining 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 Cipher Mining 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 Cipher Mining, you can compare the effects of market volatilities on Stronghold Digital and Cipher Mining 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 Cipher Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and Cipher Mining.
Diversification Opportunities for Stronghold Digital and Cipher Mining
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stronghold and Cipher is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining 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 Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and Cipher Mining go up and down completely randomly.
Pair Corralation between Stronghold Digital and Cipher Mining
Given the investment horizon of 90 days Stronghold Digital is expected to generate 2.18 times less return on investment than Cipher Mining. In addition to that, Stronghold Digital is 1.1 times more volatile than Cipher Mining. It trades about 0.03 of its total potential returns per unit of risk. Cipher Mining is currently generating about 0.08 per unit of volatility. If you would invest 120.00 in Cipher Mining on October 22, 2024 and sell it today you would earn a total of 423.00 from holding Cipher Mining or generate 352.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Stronghold Digital Mining vs. Cipher Mining
Performance |
| Timeline |
| Stronghold Digital Mining |
| Cipher Mining |
Stronghold Digital and Cipher Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stronghold Digital and Cipher Mining
The main advantage of trading using opposite Stronghold Digital and Cipher Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stronghold Digital position performs unexpectedly, Cipher Mining 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 Cipher Mining will offset losses from the drop in Cipher Mining's long position.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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