Correlation Between Terawulf and Armada Mercantile
Can any of the company-specific risk be diversified away by investing in both Terawulf and Armada Mercantile 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 Terawulf and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and Armada Mercantile, you can compare the effects of market volatilities on Terawulf and Armada Mercantile 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 Terawulf with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and Armada Mercantile.
Diversification Opportunities for Terawulf and Armada Mercantile
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Terawulf and Armada is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and Terawulf 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 Terawulf are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of Terawulf i.e., Terawulf and Armada Mercantile go up and down completely randomly.
Pair Corralation between Terawulf and Armada Mercantile
Given the investment horizon of 90 days Terawulf is expected to under-perform the Armada Mercantile. But the stock apears to be less risky and, when comparing its historical volatility, Terawulf is 2.8 times less risky than Armada Mercantile. The stock trades about -0.13 of its potential returns per unit of risk. The Armada Mercantile is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Armada Mercantile on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Armada Mercantile or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Terawulf vs. Armada Mercantile
Performance |
| Timeline |
| Terawulf |
| Armada Mercantile |
Terawulf and Armada Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and Armada Mercantile
The main advantage of trading using opposite Terawulf and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf position performs unexpectedly, Armada Mercantile 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 Armada Mercantile will offset losses from the drop in Armada Mercantile's long position.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
| Armada Mercantile vs. Arcane Crypto AB | Armada Mercantile vs. OFX Group Ltd | Armada Mercantile vs. Blockmate Ventures | Armada Mercantile vs. Bitcoin Well |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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