Correlation Between Gryphon Digital and Digihost Technology

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

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

Diversification Opportunities for Gryphon Digital and Digihost Technology

0.71

Correlation Coefficient

Gryphon Digital  Digihost Technology

Poor diversification

The 3 months correlation between Gryphon and Digihost is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gryphon Digital Mining and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology and Gryphon Digital 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 Gryphon Digital Mining 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 Gryphon Digital i.e., Gryphon Digital and Digihost Technology go up and down completely randomly.

Pair Corralation between Gryphon Digital and Digihost Technology

Given the investment horizon of 90 days Gryphon Digital is expected to generate 1.29 times less return on investment than Digihost Technology. In addition to that, Gryphon Digital is 1.21 times more volatile than Digihost Technology. It trades about 0.09 of its total potential returns per unit of risk. Digihost Technology is currently generating about 0.14 per unit of volatility. If you would invest  120.00  in Digihost Technology on September 12, 2024 and sell it today you would earn a total of  74.00  from holding Digihost Technology or generate 61.67% return on investment over 90 days.

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

Gryphon Digital Mining  vs.  Digihost Technology

Gryphon Digital Mining

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gryphon Digital Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gryphon Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Digihost Technology

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Digihost Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical indicators, Digihost Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gryphon Digital and Digihost Technology

The main advantage of trading using opposite Gryphon Digital and Digihost Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gryphon Digital 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 Gryphon Digital Mining 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.