Correlation Between Hut 8 and SAITECH Global

Can any of the company-specific risk be diversified away by investing in both Hut 8 and SAITECH Global 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 SAITECH Global 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 SAITECH Global, you can compare the effects of market volatilities on Hut 8 and SAITECH Global 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 SAITECH Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and SAITECH Global.

Diversification Opportunities for Hut 8 and SAITECH Global

0.12

Correlation Coefficient

Hut 8  SAITECH Global

Average diversification

The 3 months correlation between Hut and SAITECH is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and SAITECH Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAITECH Global 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 SAITECH Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAITECH Global has no effect on the direction of Hut 8 i.e., Hut 8 and SAITECH Global go up and down completely randomly.

Pair Corralation between Hut 8 and SAITECH Global

Considering the 90-day investment horizon Hut 8 is expected to generate 2.02 times less return on investment than SAITECH Global. But when comparing it to its historical volatility, Hut 8 Corp is 1.53 times less risky than SAITECH Global. It trades about 0.15 of its potential returns per unit of risk. SAITECH Global is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  102.00  in SAITECH Global on October 6, 2024 and sell it today you would earn a total of  15.00  from holding SAITECH Global or generate 14.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	19.51%
Values	Daily Returns

Hut 8 Corp  vs.  SAITECH Global

Hut 8 Corp

Risk-Adjusted Performance

13 of 100

Good

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

SAITECH Global

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days SAITECH Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak basic indicators, SAITECH Global demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hut 8 and SAITECH Global

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

The idea behind Hut 8 Corp and SAITECH Global 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.