Correlation Between Bakkt Holdings and Greenidge Generation

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Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings 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 Bakkt Holdings and Greenidge Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings and Greenidge Generation Holdings, you can compare the effects of market volatilities on Bakkt Holdings 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 Bakkt Holdings with a short position of Greenidge Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and Greenidge Generation.

Diversification Opportunities for Bakkt Holdings and Greenidge Generation

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bakkt and Greenidge is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation and Bakkt Holdings 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 Bakkt Holdings 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 Bakkt Holdings i.e., Bakkt Holdings and Greenidge Generation go up and down completely randomly.

Pair Corralation between Bakkt Holdings and Greenidge Generation

Given the investment horizon of 90 days Bakkt Holdings is expected to generate 1.33 times less return on investment than Greenidge Generation. In addition to that, Bakkt Holdings is 1.55 times more volatile than Greenidge Generation Holdings. It trades about 0.06 of its total potential returns per unit of risk. Greenidge Generation Holdings is currently generating about 0.12 per unit of volatility. If you would invest  100.00  in Greenidge Generation Holdings on May 6, 2025 and sell it today you would earn a total of  50.00  from holding Greenidge Generation Holdings or generate 50.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bakkt Holdings  vs.  Greenidge Generation Holdings

 Performance 
       Timeline  
Bakkt Holdings 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bakkt Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Bakkt Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.
Greenidge Generation 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Greenidge Generation Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Greenidge Generation exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bakkt Holdings and Greenidge Generation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bakkt Holdings and Greenidge Generation

The main advantage of trading using opposite Bakkt Holdings and Greenidge Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings 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.
The idea behind Bakkt Holdings and Greenidge Generation Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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