Correlation Between Tesla and Stronghold Digital
Can any of the company-specific risk be diversified away by investing in both Tesla and Stronghold Digital 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 Tesla and Stronghold Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Stronghold Digital Mining, you can compare the effects of market volatilities on Tesla and Stronghold Digital 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 Tesla with a short position of Stronghold Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Stronghold Digital.
Diversification Opportunities for Tesla and Stronghold Digital
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tesla and Stronghold is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Stronghold Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stronghold Digital Mining and Tesla 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 Tesla Inc are associated (or correlated) with Stronghold Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stronghold Digital Mining has no effect on the direction of Tesla i.e., Tesla and Stronghold Digital go up and down completely randomly.
Pair Corralation between Tesla and Stronghold Digital
Given the investment horizon of 90 days Tesla Inc is expected to generate 0.73 times more return on investment than Stronghold Digital. However, Tesla Inc is 1.37 times less risky than Stronghold Digital. It trades about 0.35 of its potential returns per unit of risk. Stronghold Digital Mining is currently generating about 0.07 per unit of risk. If you would invest 21,365 in Tesla Inc on August 24, 2024 and sell it today you would earn a total of 12,599 from holding Tesla Inc or generate 58.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Stronghold Digital Mining
Performance |
| Timeline |
| Tesla Inc |
| Stronghold Digital Mining |
Tesla and Stronghold Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Stronghold Digital
The main advantage of trading using opposite Tesla and Stronghold Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Stronghold Digital 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 Stronghold Digital will offset losses from the drop in Stronghold Digital's long position.The idea behind Tesla Inc and Stronghold Digital Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |