Correlation Between Everest and Cipher Mining

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

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

Diversification Opportunities for Everest and Cipher Mining

-0.55

Correlation Coefficient

Everest  Cipher Mining

Excellent diversification

The 3 months correlation between Everest and Cipher is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining and Everest 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 Everest Group are associated (or correlated) with Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of Everest i.e., Everest and Cipher Mining go up and down completely randomly.

Pair Corralation between Everest and Cipher Mining

Allowing for the 90-day total investment horizon Everest Group is expected to under-perform the Cipher Mining. But the stock apears to be less risky and, when comparing its historical volatility, Everest Group is 10.22 times less risky than Cipher Mining. The stock trades about -0.03 of its potential returns per unit of risk. The Cipher Mining is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Cipher Mining on May 2, 2025 and sell it today you would earn a total of  70.00  from holding Cipher Mining or generate 179.49% return on investment over 90 days.

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

Everest Group  vs.  Cipher Mining

Everest Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Cipher Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cipher Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Everest and Cipher Mining

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

The idea behind Everest Group and Cipher Mining 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.