Correlation Between Hut 8 and HIVE Blockchain

Can any of the company-specific risk be diversified away by investing in both Hut 8 and HIVE Blockchain 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 Hut 8 and HIVE Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hut 8 Corp and HIVE Blockchain Technologies, you can compare the effects of market volatilities on Hut 8 and HIVE Blockchain 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 Hut 8 with a short position of HIVE Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and HIVE Blockchain.

Diversification Opportunities for Hut 8 and HIVE Blockchain

0.88

Correlation Coefficient

Hut 8  HIVE Blockchain

Very poor diversification

The 3 months correlation between Hut and HIVE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and HIVE Blockchain Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIVE Blockchain Tech and Hut 8 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 Hut 8 Corp are associated (or correlated) with HIVE Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIVE Blockchain Tech has no effect on the direction of Hut 8 i.e., Hut 8 and HIVE Blockchain go up and down completely randomly.

Pair Corralation between Hut 8 and HIVE Blockchain

Considering the 90-day investment horizon Hut 8 Corp is expected to generate 1.0 times more return on investment than HIVE Blockchain. However, Hut 8 Corp is 1.0 times less risky than HIVE Blockchain. It trades about 0.27 of its potential returns per unit of risk. HIVE Blockchain Technologies is currently generating about 0.15 per unit of risk. If you would invest  900.00  in Hut 8 Corp on August 7, 2024 and sell it today you would earn a total of  656.00  from holding Hut 8 Corp or generate 72.89% return on investment over 90 days.

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

Hut 8 Corp  vs.  HIVE Blockchain Technologies

Hut 8 Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hut 8 Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Hut 8 unveiled solid returns over the last few months and may actually be approaching a breakup point.

HIVE Blockchain Tech

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HIVE Blockchain Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, HIVE Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hut 8 and HIVE Blockchain

The main advantage of trading using opposite Hut 8 and HIVE Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 position performs unexpectedly, HIVE Blockchain 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 HIVE Blockchain will offset losses from the drop in HIVE Blockchain's long position.

The idea behind Hut 8 Corp and HIVE Blockchain Technologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..