Correlation Between BitFuFu and Digihost Technology

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

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

Diversification Opportunities for BitFuFu and Digihost Technology

0.09

Correlation Coefficient

BitFuFu  Digihost Technology

Significant diversification

The 3 months correlation between BitFuFu and Digihost is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BitFuFu Class A and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology and BitFuFu 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 BitFuFu Class A are associated (or correlated) with Digihost Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digihost Technology has no effect on the direction of BitFuFu i.e., BitFuFu and Digihost Technology go up and down completely randomly.

Pair Corralation between BitFuFu and Digihost Technology

Given the investment horizon of 90 days BitFuFu Class A is expected to generate 0.57 times more return on investment than Digihost Technology. However, BitFuFu Class A is 1.74 times less risky than Digihost Technology. It trades about 0.0 of its potential returns per unit of risk. Digihost Technology is currently generating about 0.0 per unit of risk. If you would invest  502.00  in BitFuFu Class A on December 29, 2024 and sell it today you would lose (34.00) from holding BitFuFu Class A or give up 6.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

BitFuFu Class A  vs.  Digihost Technology

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with BitFuFu and Digihost Technology

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

The idea behind BitFuFu Class A and Digihost Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.