Correlation Between Bitfarms and Financial

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

By analyzing existing cross correlation between Bitfarms and Financial 15 Split, you can compare the effects of market volatilities on Bitfarms and Financial 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 Bitfarms with a short position of Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Financial.

Diversification Opportunities for Bitfarms and Financial

-0.51

Correlation Coefficient

Bitfarms  Financial

Excellent diversification

The 3 months correlation between Bitfarms and Financial is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split and Bitfarms 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 Bitfarms are associated (or correlated) with Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Bitfarms i.e., Bitfarms and Financial go up and down completely randomly.

Pair Corralation between Bitfarms and Financial

Assuming the 90 days trading horizon Bitfarms is expected to generate 25.73 times more return on investment than Financial. However, Bitfarms is 25.73 times more volatile than Financial 15 Split. It trades about 0.19 of its potential returns per unit of risk. Financial 15 Split is currently generating about 0.09 per unit of risk. If you would invest  253.00  in Bitfarms on August 12, 2024 and sell it today you would earn a total of  61.00  from holding Bitfarms or generate 24.11% return on investment over 90 days.

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

Bitfarms  vs.  Financial 15 Split

Bitfarms

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bitfarms are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bitfarms may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Financial 15 Split

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitfarms and Financial

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

The idea behind Bitfarms and Financial 15 Split 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.