Correlation Between Terawulf and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Terawulf and BitFrontier 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 Terawulf and BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Terawulf and BitFrontier 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 Terawulf with a short position of BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and BitFrontier Capital.
Diversification Opportunities for Terawulf and BitFrontier Capital
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Terawulf and BitFrontier is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital 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 BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Terawulf i.e., Terawulf and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Terawulf and BitFrontier Capital
Given the investment horizon of 90 days Terawulf is expected to generate 0.66 times more return on investment than BitFrontier Capital. However, Terawulf is 1.53 times less risky than BitFrontier Capital. It trades about 0.09 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.03 per unit of risk. If you would invest 121.00 in Terawulf on August 30, 2024 and sell it today you would earn a total of 608.00 from holding Terawulf or generate 502.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Terawulf vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Terawulf |
| BitFrontier Capital |
Terawulf and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and BitFrontier Capital
The main advantage of trading using opposite Terawulf and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf position performs unexpectedly, BitFrontier 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
| BitFrontier Capital vs. XTRA Bitcoin | BitFrontier Capital vs. Coin Citadel | BitFrontier Capital vs. Dmg Blockchain Solutions | BitFrontier Capital vs. Argo Blockchain PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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