Correlation Between Stronghold Digital and DeFi Technologies
Can any of the company-specific risk be diversified away by investing in both Stronghold Digital and DeFi Technologies 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 DeFi Technologies 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 DeFi Technologies, you can compare the effects of market volatilities on Stronghold Digital and DeFi Technologies 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 DeFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and DeFi Technologies.
Diversification Opportunities for Stronghold Digital and DeFi Technologies
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stronghold and DeFi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and DeFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeFi Technologies 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 DeFi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeFi Technologies has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and DeFi Technologies go up and down completely randomly.
Pair Corralation between Stronghold Digital and DeFi Technologies
Given the investment horizon of 90 days Stronghold Digital is expected to generate 1.18 times less return on investment than DeFi Technologies. In addition to that, Stronghold Digital is 1.29 times more volatile than DeFi Technologies. It trades about 0.09 of its total potential returns per unit of risk. DeFi Technologies is currently generating about 0.13 per unit of volatility. If you would invest 96.00 in DeFi Technologies on September 1, 2024 and sell it today you would earn a total of 152.00 from holding DeFi Technologies or generate 158.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stronghold Digital Mining vs. DeFi Technologies
Performance |
| Timeline |
| Stronghold Digital Mining |
| DeFi Technologies |
Stronghold Digital and DeFi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stronghold Digital and DeFi Technologies
The main advantage of trading using opposite Stronghold Digital and DeFi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stronghold Digital position performs unexpectedly, DeFi Technologies 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 DeFi Technologies will offset losses from the drop in DeFi Technologies' long position.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
| DeFi Technologies vs. Argo Blockchain PLC | DeFi Technologies vs. DigiMax Global | DeFi Technologies vs. Galaxy Digital Holdings | DeFi Technologies vs. BIG Blockchain Intelligence |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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