Correlation Between CS Disco and CleanSpark

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

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

Diversification Opportunities for CS Disco and CleanSpark

0.15

Correlation Coefficient

CS Disco  CleanSpark

Average diversification

The 3 months correlation between LAW and CleanSpark is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CS Disco LLC and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and CS Disco 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 CS Disco LLC are associated (or correlated) with CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of CS Disco i.e., CS Disco and CleanSpark go up and down completely randomly.

Pair Corralation between CS Disco and CleanSpark

Considering the 90-day investment horizon CS Disco LLC is expected to under-perform the CleanSpark. But the stock apears to be less risky and, when comparing its historical volatility, CS Disco LLC is 3.11 times less risky than CleanSpark. The stock trades about -0.08 of its potential returns per unit of risk. The CleanSpark is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  861.00  in CleanSpark on October 1, 2024 and sell it today you would earn a total of  117.00  from holding CleanSpark or generate 13.59% return on investment over 90 days.

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

CS Disco LLC  vs.  CleanSpark

CS Disco LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CS Disco LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CleanSpark

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CS Disco and CleanSpark

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

The idea behind CS Disco LLC and CleanSpark 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.