Correlation Between CleanSpark and Digihost Technology

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

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

Diversification Opportunities for CleanSpark and Digihost Technology

0.91

Correlation Coefficient

CleanSpark  Digihost Technology

Almost no diversification

The 3 months correlation between CleanSpark and Digihost is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CleanSpark and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology 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 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 CleanSpark i.e., CleanSpark and Digihost Technology go up and down completely randomly.

Pair Corralation between CleanSpark and Digihost Technology

Given the investment horizon of 90 days CleanSpark is expected to generate 1.25 times less return on investment than Digihost Technology. In addition to that, CleanSpark is 1.1 times more volatile than Digihost Technology. It trades about 0.1 of its total potential returns per unit of risk. Digihost Technology is currently generating about 0.14 per unit of volatility. If you would invest  120.00  in Digihost Technology on September 12, 2024 and sell it today you would earn a total of  74.00  from holding Digihost Technology or generate 61.67% return on investment over 90 days.

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

CleanSpark  vs.  Digihost Technology

CleanSpark

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 8 (%) 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.

Digihost Technology

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Digihost Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical indicators, Digihost Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CleanSpark and Digihost Technology

The main advantage of trading using opposite CleanSpark and Digihost Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanSpark 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 CleanSpark 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.