Correlation Between Hut 8 and Neptune Digital

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

By analyzing existing cross correlation between Hut 8 Corp and Neptune Digital Assets, you can compare the effects of market volatilities on Hut 8 and Neptune Digital 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 Neptune Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Neptune Digital.

Diversification Opportunities for Hut 8 and Neptune Digital

-0.21

Correlation Coefficient

Hut 8  Neptune Digital

Very good diversification

The 3 months correlation between Hut and Neptune is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and Neptune Digital Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neptune Digital Assets 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 Corp are associated (or correlated) with Neptune Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neptune Digital Assets has no effect on the direction of Hut 8 i.e., Hut 8 and Neptune Digital go up and down completely randomly.

Pair Corralation between Hut 8 and Neptune Digital

Considering the 90-day investment horizon Hut 8 Corp is expected to under-perform the Neptune Digital. But the stock apears to be less risky and, when comparing its historical volatility, Hut 8 Corp is 1.74 times less risky than Neptune Digital. The stock trades about -0.13 of its potential returns per unit of risk. The Neptune Digital Assets is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  74.00  in Neptune Digital Assets on December 27, 2024 and sell it today you would earn a total of  48.00  from holding Neptune Digital Assets or generate 64.86% return on investment over 90 days.

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

Hut 8 Corp  vs.  Neptune Digital Assets

Hut 8 Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hut 8 Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Neptune Digital Assets

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neptune Digital Assets are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Neptune Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hut 8 and Neptune Digital

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

The idea behind Hut 8 Corp and Neptune Digital Assets 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.