Correlation Between Cipher Mining and CleanSpark

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

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

Diversification Opportunities for Cipher Mining and CleanSpark

0.93

Correlation Coefficient

Cipher Mining  CleanSpark

Almost no diversification

The 3 months correlation between Cipher and CleanSpark is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Mining and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and Cipher Mining 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 Cipher Mining 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 Cipher Mining i.e., Cipher Mining and CleanSpark go up and down completely randomly.

Pair Corralation between Cipher Mining and CleanSpark

Given the investment horizon of 90 days Cipher Mining is expected to generate 0.95 times more return on investment than CleanSpark. However, Cipher Mining is 1.06 times less risky than CleanSpark. It trades about 0.19 of its potential returns per unit of risk. CleanSpark is currently generating about 0.09 per unit of risk. If you would invest  298.00  in Cipher Mining on September 17, 2024 and sell it today you would earn a total of  315.00  from holding Cipher Mining or generate 105.7% return on investment over 90 days.

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

Cipher Mining  vs.  CleanSpark

Cipher Mining

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Cipher Mining reported solid returns over the last few months and may actually be approaching a breakup point.

CleanSpark

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cipher Mining and CleanSpark

The main advantage of trading using opposite Cipher Mining and CleanSpark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipher Mining 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 Cipher Mining 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.