Correlation Between CaliberCos and Cipher Mining

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

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

Diversification Opportunities for CaliberCos and Cipher Mining

-0.62

Correlation Coefficient

CaliberCos  Cipher Mining

Excellent diversification

The 3 months correlation between CaliberCos and Cipher is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CaliberCos Class A and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining and CaliberCos 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 CaliberCos Class A are associated (or correlated) with Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of CaliberCos i.e., CaliberCos and Cipher Mining go up and down completely randomly.

Pair Corralation between CaliberCos and Cipher Mining

Considering the 90-day investment horizon CaliberCos is expected to generate 8.77 times less return on investment than Cipher Mining. But when comparing it to its historical volatility, CaliberCos Class A is 1.19 times less risky than Cipher Mining. It trades about 0.01 of its potential returns per unit of risk. Cipher Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Cipher Mining on October 23, 2024 and sell it today you would earn a total of  28.00  from holding Cipher Mining or generate 5.44% return on investment over 90 days.

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

CaliberCos Class A  vs.  Cipher Mining

CaliberCos Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CaliberCos Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CaliberCos is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cipher Mining

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 3 (%) 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.

Pair Trading with CaliberCos and Cipher Mining

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

The idea behind CaliberCos Class A and Cipher Mining 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.