Correlation Between CleanSpark and SemiLEDS

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

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

Diversification Opportunities for CleanSpark and SemiLEDS

0.05

Correlation Coefficient

CleanSpark  SemiLEDS

Significant diversification

The 3 months correlation between CleanSpark and SemiLEDS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CleanSpark and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS 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 SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of CleanSpark i.e., CleanSpark and SemiLEDS go up and down completely randomly.

Pair Corralation between CleanSpark and SemiLEDS

Given the investment horizon of 90 days CleanSpark is expected to generate 1.3 times more return on investment than SemiLEDS. However, CleanSpark is 1.3 times more volatile than SemiLEDS. It trades about 0.08 of its potential returns per unit of risk. SemiLEDS is currently generating about 0.02 per unit of risk. If you would invest  280.00  in CleanSpark on October 21, 2024 and sell it today you would earn a total of  907.00  from holding CleanSpark or generate 323.93% return on investment over 90 days.

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

CleanSpark  vs.  SemiLEDS

CleanSpark

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, CleanSpark may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SemiLEDS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SemiLEDS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, SemiLEDS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CleanSpark and SemiLEDS

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

The idea behind CleanSpark and SemiLEDS 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.