Correlation Between CleanSpark and Applied Digital

Can any of the company-specific risk be diversified away by investing in both CleanSpark and Applied 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 CleanSpark and Applied Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CleanSpark and Applied Digital, you can compare the effects of market volatilities on CleanSpark and Applied 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 CleanSpark with a short position of Applied Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanSpark and Applied Digital.

Diversification Opportunities for CleanSpark and Applied Digital

0.22

Correlation Coefficient

CleanSpark  Applied Digital

Modest diversification

The 3 months correlation between CleanSpark and Applied is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CleanSpark and Applied Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Digital and CleanSpark 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 CleanSpark are associated (or correlated) with Applied Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Digital has no effect on the direction of CleanSpark i.e., CleanSpark and Applied Digital go up and down completely randomly.

Pair Corralation between CleanSpark and Applied Digital

Given the investment horizon of 90 days CleanSpark is expected to generate 13.99 times less return on investment than Applied Digital. But when comparing it to its historical volatility, CleanSpark is 2.12 times less risky than Applied Digital. It trades about 0.03 of its potential returns per unit of risk. Applied Digital is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  683.00  in Applied Digital on May 16, 2025 and sell it today you would earn a total of  814.00  from holding Applied Digital or generate 119.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CleanSpark  vs.  Applied Digital

CleanSpark

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, CleanSpark may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Applied Digital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Digital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CleanSpark and Applied Digital

The main advantage of trading using opposite CleanSpark and Applied Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanSpark position performs unexpectedly, Applied 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 Applied Digital will offset losses from the drop in Applied Digital's long position.

The idea behind CleanSpark and Applied Digital 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.