Correlation Between Terawulf and Stronghold Digital
Can any of the company-specific risk be diversified away by investing in both Terawulf and Stronghold 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 Stronghold Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and Stronghold Digital Mining, you can compare the effects of market volatilities on Terawulf and Stronghold 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 Stronghold Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and Stronghold Digital.
Diversification Opportunities for Terawulf and Stronghold Digital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Terawulf and Stronghold is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and Stronghold Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stronghold Digital Mining 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 Stronghold Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stronghold Digital Mining has no effect on the direction of Terawulf i.e., Terawulf and Stronghold Digital go up and down completely randomly.
Pair Corralation between Terawulf and Stronghold Digital
Given the investment horizon of 90 days Terawulf is expected to generate 1.13 times less return on investment than Stronghold Digital. But when comparing it to its historical volatility, Terawulf is 1.36 times less risky than Stronghold Digital. It trades about 0.06 of its potential returns per unit of risk. Stronghold Digital Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Stronghold Digital Mining on October 22, 2024 and sell it today you would earn a total of 53.00 from holding Stronghold Digital Mining or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terawulf vs. Stronghold Digital Mining
Performance |
| Timeline |
| Terawulf |
| Stronghold Digital Mining |
Terawulf and Stronghold Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and Stronghold Digital
The main advantage of trading using opposite Terawulf and Stronghold Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf position performs unexpectedly, Stronghold 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 Stronghold Digital will offset losses from the drop in Stronghold Digital's long position.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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