Correlation Between Cipher Mining and Argo Blockchain

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

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

Diversification Opportunities for Cipher Mining and Argo Blockchain

-0.22

Correlation Coefficient

Cipher Mining  Argo Blockchain

Very good diversification

The 3 months correlation between Cipher and Argo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Mining and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC and Cipher Mining 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 Cipher Mining are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of Cipher Mining i.e., Cipher Mining and Argo Blockchain go up and down completely randomly.

Pair Corralation between Cipher Mining and Argo Blockchain

Given the investment horizon of 90 days Cipher Mining is expected to generate 0.95 times more return on investment than Argo Blockchain. However, Cipher Mining is 1.05 times less risky than Argo Blockchain. It trades about 0.05 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about -0.05 per unit of risk. If you would invest  391.00  in Cipher Mining on October 1, 2024 and sell it today you would earn a total of  95.00  from holding Cipher Mining or generate 24.3% return on investment over 90 days.

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

Cipher Mining  vs.  Argo Blockchain PLC

Cipher Mining

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Cipher Mining reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cipher Mining and Argo Blockchain

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

The idea behind Cipher Mining and Argo Blockchain PLC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.