Correlation Between Stronghold Digital and Mentor Capital
Can any of the company-specific risk be diversified away by investing in both Stronghold Digital and Mentor Capital 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 Mentor Capital 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 Mentor Capital, you can compare the effects of market volatilities on Stronghold Digital and Mentor Capital 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 Mentor Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and Mentor Capital.
Diversification Opportunities for Stronghold Digital and Mentor Capital
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stronghold and Mentor is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and Mentor Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mentor Capital 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 Mentor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mentor Capital has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and Mentor Capital go up and down completely randomly.
Pair Corralation between Stronghold Digital and Mentor Capital
Given the investment horizon of 90 days Stronghold Digital Mining is expected to under-perform the Mentor Capital. But the stock apears to be less risky and, when comparing its historical volatility, Stronghold Digital Mining is 1.66 times less risky than Mentor Capital. The stock trades about -0.05 of its potential returns per unit of risk. The Mentor Capital is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Mentor Capital on December 25, 2024 and sell it today you would lose (0.20) from holding Mentor Capital or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Stronghold Digital Mining vs. Mentor Capital
Performance |
| Timeline |
| Stronghold Digital Mining |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Mentor Capital |
Stronghold Digital and Mentor Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stronghold Digital and Mentor Capital
The main advantage of trading using opposite Stronghold Digital and Mentor Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stronghold Digital position performs unexpectedly, Mentor Capital 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 Mentor Capital will offset losses from the drop in Mentor Capital's long position.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
| Mentor Capital vs. OFX Group Ltd | Mentor Capital vs. Pinetree Capital | Mentor Capital vs. GreenBank Capital | Mentor Capital vs. Halitron |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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