Correlation Between CleanSpark and DigiMax Global

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

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

Diversification Opportunities for CleanSpark and DigiMax Global

-0.07

Correlation Coefficient

CleanSpark  DigiMax Global

Good diversification

The 3 months correlation between CleanSpark and DigiMax is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CleanSpark and DigiMax Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiMax Global and CleanSpark 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 CleanSpark are associated (or correlated) with DigiMax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiMax Global has no effect on the direction of CleanSpark i.e., CleanSpark and DigiMax Global go up and down completely randomly.

Pair Corralation between CleanSpark and DigiMax Global

Given the investment horizon of 90 days CleanSpark is expected to generate 21.42 times less return on investment than DigiMax Global. But when comparing it to its historical volatility, CleanSpark is 13.74 times less risky than DigiMax Global. It trades about 0.08 of its potential returns per unit of risk. DigiMax Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3.50  in DigiMax Global on October 10, 2024 and sell it today you would lose (2.49) from holding DigiMax Global or give up 71.14% of portfolio value over 90 days.

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

CleanSpark  vs.  DigiMax Global

CleanSpark

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

DigiMax Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DigiMax Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DigiMax Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CleanSpark and DigiMax Global

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

The idea behind CleanSpark and DigiMax Global 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 Valuation module to check real value of public entities based on technical and fundamental data.