Correlation Between Terawulf and DeFi Technologies
Can any of the company-specific risk be diversified away by investing in both Terawulf and DeFi Technologies 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 DeFi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and DeFi Technologies, you can compare the effects of market volatilities on Terawulf and DeFi Technologies 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 DeFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and DeFi Technologies.
Diversification Opportunities for Terawulf and DeFi Technologies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Terawulf and DeFi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and DeFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeFi Technologies 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 DeFi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeFi Technologies has no effect on the direction of Terawulf i.e., Terawulf and DeFi Technologies go up and down completely randomly.
Pair Corralation between Terawulf and DeFi Technologies
Given the investment horizon of 90 days Terawulf is expected to generate 1.58 times less return on investment than DeFi Technologies. But when comparing it to its historical volatility, Terawulf is 1.2 times less risky than DeFi Technologies. It trades about 0.09 of its potential returns per unit of risk. DeFi Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9.74 in DeFi Technologies on August 30, 2024 and sell it today you would earn a total of 218.26 from holding DeFi Technologies or generate 2240.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terawulf vs. DeFi Technologies
Performance |
| Timeline |
| Terawulf |
| DeFi Technologies |
Terawulf and DeFi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and DeFi Technologies
The main advantage of trading using opposite Terawulf and DeFi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf position performs unexpectedly, DeFi Technologies 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 DeFi Technologies will offset losses from the drop in DeFi Technologies' long position.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
| DeFi Technologies vs. Argo Blockchain PLC | DeFi Technologies vs. DigiMax Global | DeFi Technologies vs. Galaxy Digital Holdings | DeFi Technologies vs. BIG Blockchain Intelligence |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |