Correlation Between Bitfarms and HIVE Blockchain

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

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

Diversification Opportunities for Bitfarms and HIVE Blockchain

0.96

Correlation Coefficient

Bitfarms  HIVE Blockchain

Almost no diversification

The 3 months correlation between Bitfarms and HIVE is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms 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 Bitfarms 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 Bitfarms 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 Bitfarms i.e., Bitfarms and HIVE Blockchain go up and down completely randomly.

Pair Corralation between Bitfarms and HIVE Blockchain

Given the investment horizon of 90 days Bitfarms is expected to under-perform the HIVE Blockchain. In addition to that, Bitfarms is 1.18 times more volatile than HIVE Blockchain Technologies. It trades about -0.2 of its total potential returns per unit of risk. HIVE Blockchain Technologies is currently generating about -0.2 per unit of volatility. If you would invest  408.00  in HIVE Blockchain Technologies on November 28, 2024 and sell it today you would lose (170.00) from holding HIVE Blockchain Technologies or give up 41.67% of portfolio value over 90 days.

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

Bitfarms  vs.  HIVE Blockchain Technologies

Bitfarms

Risk-Adjusted Performance

Very Weak

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

HIVE Blockchain Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days HIVE Blockchain Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bitfarms and HIVE Blockchain

The main advantage of trading using opposite Bitfarms and HIVE Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms 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 Bitfarms 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.