Correlation Between Terawulf and CleanSpark

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

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

Diversification Opportunities for Terawulf and CleanSpark

0.85

Correlation Coefficient

Terawulf  CleanSpark

Very poor diversification

The 3 months correlation between Terawulf and CleanSpark is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and Terawulf 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 Terawulf 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 Terawulf i.e., Terawulf and CleanSpark go up and down completely randomly.

Pair Corralation between Terawulf and CleanSpark

Given the investment horizon of 90 days Terawulf is expected to under-perform the CleanSpark. In addition to that, Terawulf is 1.49 times more volatile than CleanSpark. It trades about -0.13 of its total potential returns per unit of risk. CleanSpark is currently generating about -0.17 per unit of volatility. If you would invest  1,435  in CleanSpark on November 28, 2024 and sell it today you would lose (647.00) from holding CleanSpark or give up 45.09% of portfolio value over 90 days.

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

Terawulf  vs.  CleanSpark

Terawulf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Terawulf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CleanSpark

Risk-Adjusted Performance

Very Weak

Over the last 90 days CleanSpark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Terawulf and CleanSpark

The main advantage of trading using opposite Terawulf and CleanSpark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf 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 Terawulf 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.