Correlation Between Sphere 3D and Digihost Technology

Can any of the company-specific risk be diversified away by investing in both Sphere 3D and Digihost Technology 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 Sphere 3D and Digihost Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sphere 3D Corp and Digihost Technology, you can compare the effects of market volatilities on Sphere 3D and Digihost Technology 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 Sphere 3D with a short position of Digihost Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere 3D and Digihost Technology.

Diversification Opportunities for Sphere 3D and Digihost Technology

0.03

Correlation Coefficient

Sphere 3D  Digihost Technology

Significant diversification

The 3 months correlation between Sphere and Digihost is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sphere 3D Corp and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology and Sphere 3D 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 Sphere 3D Corp are associated (or correlated) with Digihost Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digihost Technology has no effect on the direction of Sphere 3D i.e., Sphere 3D and Digihost Technology go up and down completely randomly.

Pair Corralation between Sphere 3D and Digihost Technology

Considering the 90-day investment horizon Sphere 3D Corp is expected to under-perform the Digihost Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sphere 3D Corp is 2.12 times less risky than Digihost Technology. The stock trades about -0.28 of its potential returns per unit of risk. The Digihost Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Digihost Technology on December 28, 2024 and sell it today you would lose (31.00) from holding Digihost Technology or give up 19.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

Sphere 3D Corp  vs.  Digihost Technology

Sphere 3D Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sphere 3D Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Digihost Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digihost Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Digihost Technology is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sphere 3D and Digihost Technology

The main advantage of trading using opposite Sphere 3D and Digihost Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere 3D position performs unexpectedly, Digihost Technology 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 Digihost Technology will offset losses from the drop in Digihost Technology's long position.

The idea behind Sphere 3D Corp and Digihost Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.