Correlation Between CleanSpark and BitFuFu

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

By analyzing existing cross correlation between CleanSpark and BitFuFu Class A, you can compare the effects of market volatilities on CleanSpark and BitFuFu 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 BitFuFu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanSpark and BitFuFu.

Diversification Opportunities for CleanSpark and BitFuFu

0.46

Correlation Coefficient

CleanSpark  BitFuFu

Very weak diversification

The 3 months correlation between CleanSpark and BitFuFu is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CleanSpark and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Class A 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 BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of CleanSpark i.e., CleanSpark and BitFuFu go up and down completely randomly.

Pair Corralation between CleanSpark and BitFuFu

Given the investment horizon of 90 days CleanSpark is expected to generate 1.49 times more return on investment than BitFuFu. However, CleanSpark is 1.49 times more volatile than BitFuFu Class A. It trades about -0.02 of its potential returns per unit of risk. BitFuFu Class A is currently generating about -0.16 per unit of risk. If you would invest  1,096  in CleanSpark on November 19, 2024 and sell it today you would lose (46.00) from holding CleanSpark or give up 4.2% of portfolio value over 90 days.

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

CleanSpark  vs.  BitFuFu Class A

CleanSpark

Risk-Adjusted Performance

Very Weak

Over the last 90 days CleanSpark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

BitFuFu Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days BitFuFu Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BitFuFu is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CleanSpark and BitFuFu

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

The idea behind CleanSpark and BitFuFu Class A 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.