Correlation Between Greenidge Generation and Terawulf

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

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

Diversification Opportunities for Greenidge Generation and Terawulf

0.65

Correlation Coefficient

Greenidge Generation  Terawulf

Poor diversification

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

Pair Corralation between Greenidge Generation and Terawulf

Given the investment horizon of 90 days Greenidge Generation Holdings is expected to under-perform the Terawulf. But the stock apears to be less risky and, when comparing its historical volatility, Greenidge Generation Holdings is 1.13 times less risky than Terawulf. The stock trades about -0.01 of its potential returns per unit of risk. The Terawulf is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  112.00  in Terawulf on September 21, 2024 and sell it today you would earn a total of  549.00  from holding Terawulf or generate 490.18% return on investment over 90 days.

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

Greenidge Generation Holdings  vs.  Terawulf

Greenidge Generation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Greenidge Generation Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Greenidge Generation exhibited solid returns over the last few months and may actually be approaching a breakup point.

Terawulf

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Terawulf are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal essential indicators, Terawulf reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenidge Generation and Terawulf

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

The idea behind Greenidge Generation Holdings and Terawulf 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.