Correlation Between Digihost Technology and CleanSpark

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

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

Diversification Opportunities for Digihost Technology and CleanSpark

0.03

Correlation Coefficient

Digihost Technology  CleanSpark

Significant diversification

The 3 months correlation between Digihost and CleanSpark is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Digihost Technology and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and Digihost Technology 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 Digihost Technology are associated (or correlated) with CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of Digihost Technology i.e., Digihost Technology and CleanSpark go up and down completely randomly.

Pair Corralation between Digihost Technology and CleanSpark

Given the investment horizon of 90 days Digihost Technology is expected to generate 1.85 times more return on investment than CleanSpark. However, Digihost Technology is 1.85 times more volatile than CleanSpark. It trades about -0.01 of its potential returns per unit of risk. CleanSpark is currently generating about -0.17 per unit of risk. If you would invest  212.00  in Digihost Technology on November 28, 2024 and sell it today you would lose (54.00) from holding Digihost Technology or give up 25.47% of portfolio value over 90 days.

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

Digihost Technology  vs.  CleanSpark

Digihost Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digihost Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Digihost Technology is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

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.

Pair Trading with Digihost Technology and CleanSpark

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

The idea behind Digihost Technology and CleanSpark 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 Transaction History module to view history of all your transactions and understand their impact on performance.