Correlation Between Smith Midland and Bitmine Immersion
Can any of the company-specific risk be diversified away by investing in both Smith Midland and Bitmine Immersion 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 Smith Midland and Bitmine Immersion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smith Midland Corp and Bitmine Immersion Technologies, you can compare the effects of market volatilities on Smith Midland and Bitmine Immersion 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 Smith Midland with a short position of Bitmine Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smith Midland and Bitmine Immersion.
Diversification Opportunities for Smith Midland and Bitmine Immersion
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smith and Bitmine is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Smith Midland Corp and Bitmine Immersion Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitmine Immersion and Smith Midland 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 Smith Midland Corp are associated (or correlated) with Bitmine Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitmine Immersion has no effect on the direction of Smith Midland i.e., Smith Midland and Bitmine Immersion go up and down completely randomly.
Pair Corralation between Smith Midland and Bitmine Immersion
Given the investment horizon of 90 days Smith Midland is expected to generate 4.62 times less return on investment than Bitmine Immersion. But when comparing it to its historical volatility, Smith Midland Corp is 3.74 times less risky than Bitmine Immersion. It trades about 0.1 of its potential returns per unit of risk. Bitmine Immersion Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Bitmine Immersion Technologies on October 26, 2024 and sell it today you would earn a total of 12.00 from holding Bitmine Immersion Technologies or generate 63.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Smith Midland Corp vs. Bitmine Immersion Technologies
Performance |
| Timeline |
| Smith Midland Corp |
| Bitmine Immersion |
Smith Midland and Bitmine Immersion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smith Midland and Bitmine Immersion
The main advantage of trading using opposite Smith Midland and Bitmine Immersion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smith Midland position performs unexpectedly, Bitmine Immersion 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 Bitmine Immersion will offset losses from the drop in Bitmine Immersion's long position.| Smith Midland vs. United States Lime | Smith Midland vs. Holcim | Smith Midland vs. Lafargeholcim Ltd ADR | Smith Midland vs. Cementos Pacasmayo SAA |
| Bitmine Immersion vs. Cytta Corp | Bitmine Immersion vs. Mawson Infrastructure Group | Bitmine Immersion vs. World Technology Corp | Bitmine Immersion vs. Bagger Daves Burger |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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