Correlation Between Hut 8 and Canaccord Genuity

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

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

Diversification Opportunities for Hut 8 and Canaccord Genuity

0.89

Correlation Coefficient

Hut 8  Canaccord Genuity

Very poor diversification

The 3 months correlation between Hut and Canaccord is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Mining and Canaccord Genuity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaccord Genuity and Hut 8 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 Hut 8 Mining are associated (or correlated) with Canaccord Genuity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaccord Genuity has no effect on the direction of Hut 8 i.e., Hut 8 and Canaccord Genuity go up and down completely randomly.

Pair Corralation between Hut 8 and Canaccord Genuity

Assuming the 90 days trading horizon Hut 8 Mining is expected to under-perform the Canaccord Genuity. In addition to that, Hut 8 is 5.23 times more volatile than Canaccord Genuity Group. It trades about -0.12 of its total potential returns per unit of risk. Canaccord Genuity Group is currently generating about -0.27 per unit of volatility. If you would invest  1,090  in Canaccord Genuity Group on October 3, 2024 and sell it today you would lose (79.00) from holding Canaccord Genuity Group or give up 7.25% of portfolio value over 90 days.

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

Hut 8 Mining  vs.  Canaccord Genuity Group

Hut 8 Mining

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hut 8 Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Hut 8 displayed solid returns over the last few months and may actually be approaching a breakup point.

Canaccord Genuity

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canaccord Genuity Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Canaccord Genuity displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hut 8 and Canaccord Genuity

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

The idea behind Hut 8 Mining and Canaccord Genuity Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.