Correlation Between North American and HIVE Blockchain

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

By analyzing existing cross correlation between North American Financial and HIVE Blockchain Technologies, you can compare the effects of market volatilities on North American and HIVE Blockchain 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 North American with a short position of HIVE Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and HIVE Blockchain.

Diversification Opportunities for North American and HIVE Blockchain

0.75

Correlation Coefficient

North American  HIVE Blockchain

Poor diversification

The 3 months correlation between North and HIVE is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding North American Financial and HIVE Blockchain Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIVE Blockchain Tech and North American 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 North American Financial are associated (or correlated) with HIVE Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIVE Blockchain Tech has no effect on the direction of North American i.e., North American and HIVE Blockchain go up and down completely randomly.

Pair Corralation between North American and HIVE Blockchain

Assuming the 90 days trading horizon North American Financial is expected to generate 0.48 times more return on investment than HIVE Blockchain. However, North American Financial is 2.09 times less risky than HIVE Blockchain. It trades about -0.07 of its potential returns per unit of risk. HIVE Blockchain Technologies is currently generating about -0.21 per unit of risk. If you would invest  682.00  in North American Financial on December 21, 2024 and sell it today you would lose (63.00) from holding North American Financial or give up 9.24% of portfolio value over 90 days.

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

North American Financial  vs.  HIVE Blockchain Technologies

North American Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days North American Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

HIVE Blockchain Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days HIVE Blockchain Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with North American and HIVE Blockchain

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

The idea behind North American Financial and HIVE Blockchain Technologies 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.