Correlation Between Blue Ribbon and Hut 8

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

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

Diversification Opportunities for Blue Ribbon and Hut 8

0.91

Correlation Coefficient

Blue Ribbon  Hut 8

Almost no diversification

The 3 months correlation between Blue and Hut is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Blue Ribbon Income and Hut 8 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hut 8 Mining and Blue Ribbon 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 Blue Ribbon Income are associated (or correlated) with Hut 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hut 8 Mining has no effect on the direction of Blue Ribbon i.e., Blue Ribbon and Hut 8 go up and down completely randomly.

Pair Corralation between Blue Ribbon and Hut 8

Assuming the 90 days trading horizon Blue Ribbon Income is expected to generate 0.21 times more return on investment than Hut 8. However, Blue Ribbon Income is 4.82 times less risky than Hut 8. It trades about -0.19 of its potential returns per unit of risk. Hut 8 Mining is currently generating about -0.11 per unit of risk. If you would invest  854.00  in Blue Ribbon Income on December 21, 2024 and sell it today you would lose (118.00) from holding Blue Ribbon Income or give up 13.82% of portfolio value over 90 days.

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

Blue Ribbon Income  vs.  Hut 8 Mining

Blue Ribbon Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Ribbon Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hut 8 Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hut 8 Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Blue Ribbon and Hut 8

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

The idea behind Blue Ribbon Income and Hut 8 Mining 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.