Correlation Between Terawulf and Greenidge Generation
Can any of the company-specific risk be diversified away by investing in both Terawulf and Greenidge Generation 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 Greenidge Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and Greenidge Generation Holdings, you can compare the effects of market volatilities on Terawulf and Greenidge Generation 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 Greenidge Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and Greenidge Generation.
Diversification Opportunities for Terawulf and Greenidge Generation
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Terawulf and Greenidge is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Terawulf i.e., Terawulf and Greenidge Generation go up and down completely randomly.
Pair Corralation between Terawulf and Greenidge Generation
Given the investment horizon of 90 days Terawulf is expected to generate 1.83 times more return on investment than Greenidge Generation. However, Terawulf is 1.83 times more volatile than Greenidge Generation Holdings. It trades about -0.02 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about -0.17 per unit of risk. If you would invest 546.00 in Terawulf on November 3, 2024 and sell it today you would lose (69.00) from holding Terawulf or give up 12.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Terawulf vs. Greenidge Generation Holdings
Performance |
| Timeline |
| Terawulf |
| Greenidge Generation |
Terawulf and Greenidge Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and Greenidge Generation
The main advantage of trading using opposite Terawulf and Greenidge Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf position performs unexpectedly, Greenidge Generation 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 Greenidge Generation will offset losses from the drop in Greenidge Generation's long position.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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