Correlation Between Stronghold Digital and SalMar ASA

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

By analyzing existing cross correlation between Stronghold Digital Mining and SalMar ASA, you can compare the effects of market volatilities on Stronghold Digital and SalMar ASA 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 Stronghold Digital with a short position of SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and SalMar ASA.

Diversification Opportunities for Stronghold Digital and SalMar ASA

-0.38

Correlation Coefficient

Stronghold Digital  SalMar ASA

Very good diversification

The 3 months correlation between Stronghold and SalMar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA and Stronghold Digital 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 Stronghold Digital Mining are associated (or correlated) with SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and SalMar ASA go up and down completely randomly.

Pair Corralation between Stronghold Digital and SalMar ASA

Given the investment horizon of 90 days Stronghold Digital Mining is expected to generate 3.57 times more return on investment than SalMar ASA. However, Stronghold Digital is 3.57 times more volatile than SalMar ASA. It trades about 0.04 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.04 per unit of risk. If you would invest  428.00  in Stronghold Digital Mining on September 14, 2024 and sell it today you would earn a total of  69.00  from holding Stronghold Digital Mining or generate 16.12% return on investment over 90 days.

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

Stronghold Digital Mining  vs.  SalMar ASA

Stronghold Digital Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stronghold Digital Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Stronghold Digital reported solid returns over the last few months and may actually be approaching a breakup point.

SalMar ASA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SalMar ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SalMar ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stronghold Digital and SalMar ASA

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

The idea behind Stronghold Digital Mining and SalMar ASA 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 CEOs Directory module to screen CEOs from public companies around the world.