Correlation Between Cipher Mining and Greenidge Generation

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

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

Diversification Opportunities for Cipher Mining and Greenidge Generation

0.63

Correlation Coefficient

Cipher Mining  Greenidge Generation

Poor diversification

The 3 months correlation between Cipher and Greenidge is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Mining and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Cipher Mining i.e., Cipher Mining and Greenidge Generation go up and down completely randomly.

Pair Corralation between Cipher Mining and Greenidge Generation

Given the investment horizon of 90 days Cipher Mining is expected to generate 1.71 times more return on investment than Greenidge Generation. However, Cipher Mining is 1.71 times more volatile than Greenidge Generation Holdings. It trades about 0.01 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about -0.14 per unit of risk. If you would invest  563.00  in Cipher Mining on September 27, 2024 and sell it today you would lose (30.00) from holding Cipher Mining or give up 5.33% of portfolio value over 90 days.

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

Cipher Mining  vs.  Greenidge Generation Holdings

Cipher Mining

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 6 (%) 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.

Greenidge Generation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenidge Generation Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Greenidge Generation is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cipher Mining and Greenidge Generation

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

The idea behind Cipher Mining and Greenidge Generation Holdings 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.