Correlation Between Guardian Capital and Hut 8

Can any of the company-specific risk be diversified away by investing in both Guardian Capital and Hut 8 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 Guardian Capital and Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guardian Capital Group and Hut 8 Mining, you can compare the effects of market volatilities on Guardian Capital and Hut 8 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 Guardian Capital with a short position of Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and Hut 8.

Diversification Opportunities for Guardian Capital and Hut 8

0.65

Correlation Coefficient

Guardian Capital  Hut 8

Poor diversification

The 3 months correlation between Guardian and Hut is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Hut 8 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hut 8 Mining and Guardian Capital 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 Guardian Capital Group are associated (or correlated) with Hut 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hut 8 Mining has no effect on the direction of Guardian Capital i.e., Guardian Capital and Hut 8 go up and down completely randomly.

Pair Corralation between Guardian Capital and Hut 8

Assuming the 90 days trading horizon Guardian Capital Group is expected to generate 0.3 times more return on investment than Hut 8. However, Guardian Capital Group is 3.39 times less risky than Hut 8. It trades about 0.02 of its potential returns per unit of risk. Hut 8 Mining is currently generating about -0.11 per unit of risk. If you would invest  4,075  in Guardian Capital Group on December 22, 2024 and sell it today you would earn a total of  32.00  from holding Guardian Capital Group or generate 0.79% return on investment over 90 days.

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

Guardian Capital Group  vs.  Hut 8 Mining

Guardian Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Capital Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Guardian Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Hut 8 Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hut 8 Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Guardian Capital and Hut 8

The main advantage of trading using opposite Guardian Capital and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Capital position performs unexpectedly, Hut 8 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 Hut 8 will offset losses from the drop in Hut 8's long position.

The idea behind Guardian Capital Group and Hut 8 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.