Correlation Between Argo Blockchain and Bitfarms

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

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

Diversification Opportunities for Argo Blockchain and Bitfarms

0.14

Correlation Coefficient

Argo Blockchain  Bitfarms

Average diversification

The 3 months correlation between Argo and Bitfarms is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and Argo Blockchain 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 Argo Blockchain PLC are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Argo Blockchain i.e., Argo Blockchain and Bitfarms go up and down completely randomly.

Pair Corralation between Argo Blockchain and Bitfarms

Assuming the 90 days horizon Argo Blockchain is expected to generate 1.61 times less return on investment than Bitfarms. In addition to that, Argo Blockchain is 1.58 times more volatile than Bitfarms. It trades about 0.02 of its total potential returns per unit of risk. Bitfarms is currently generating about 0.05 per unit of volatility. If you would invest  110.00  in Bitfarms on September 21, 2024 and sell it today you would earn a total of  59.00  from holding Bitfarms or generate 53.64% return on investment over 90 days.

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

Argo Blockchain PLC  vs.  Bitfarms

Argo Blockchain PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argo Blockchain PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Bitfarms

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bitfarms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Argo Blockchain and Bitfarms

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

The idea behind Argo Blockchain PLC and Bitfarms 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.