Correlation Between Terawulf and Bit Digital
Can any of the company-specific risk be diversified away by investing in both Terawulf and Bit 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 Terawulf and Bit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and Bit Digital, you can compare the effects of market volatilities on Terawulf and Bit 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 Terawulf with a short position of Bit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and Bit Digital.
Diversification Opportunities for Terawulf and Bit Digital
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Terawulf and Bit is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital 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 Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of Terawulf i.e., Terawulf and Bit Digital go up and down completely randomly.
Pair Corralation between Terawulf and Bit Digital
Given the investment horizon of 90 days Terawulf is expected to under-perform the Bit Digital. In addition to that, Terawulf is 1.35 times more volatile than Bit Digital. It trades about -0.03 of its total potential returns per unit of risk. Bit Digital is currently generating about 0.06 per unit of volatility. If you would invest 312.00 in Bit Digital on November 2, 2024 and sell it today you would earn a total of 13.00 from holding Bit Digital or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terawulf vs. Bit Digital
Performance |
| Timeline |
| Terawulf |
| Bit Digital |
Terawulf and Bit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and Bit Digital
The main advantage of trading using opposite Terawulf and Bit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf position performs unexpectedly, Bit 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 Bit Digital will offset losses from the drop in Bit Digital's long position.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
| Bit Digital vs. Hut 8 Corp | Bit Digital vs. HIVE Blockchain Technologies | Bit Digital vs. CleanSpark | Bit Digital vs. Terawulf |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |