Correlation Between CryptoStar Corp and Hut 8

Can any of the company-specific risk be diversified away by investing in both CryptoStar Corp and Hut 8 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 CryptoStar Corp and Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CryptoStar Corp and Hut 8 Mining, you can compare the effects of market volatilities on CryptoStar Corp and Hut 8 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 CryptoStar Corp with a short position of Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of CryptoStar Corp and Hut 8.

Diversification Opportunities for CryptoStar Corp and Hut 8

0.85

Correlation Coefficient

CryptoStar Corp  Hut 8

Very poor diversification

The 3 months correlation between CryptoStar and Hut is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CryptoStar Corp and Hut 8 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hut 8 Mining and CryptoStar Corp 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 CryptoStar Corp are associated (or correlated) with Hut 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hut 8 Mining has no effect on the direction of CryptoStar Corp i.e., CryptoStar Corp and Hut 8 go up and down completely randomly.

Pair Corralation between CryptoStar Corp and Hut 8

Assuming the 90 days trading horizon CryptoStar Corp is expected to generate 1.95 times less return on investment than Hut 8. In addition to that, CryptoStar Corp is 1.96 times more volatile than Hut 8 Mining. It trades about 0.08 of its total potential returns per unit of risk. Hut 8 Mining is currently generating about 0.32 per unit of volatility. If you would invest  1,233  in Hut 8 Mining on August 31, 2024 and sell it today you would earn a total of  2,607  from holding Hut 8 Mining or generate 211.44% return on investment over 90 days.

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

CryptoStar Corp  vs.  Hut 8 Mining

CryptoStar Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CryptoStar Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CryptoStar Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Hut 8 Mining

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hut 8 Mining are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Hut 8 displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CryptoStar Corp and Hut 8

The main advantage of trading using opposite CryptoStar Corp and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CryptoStar Corp position performs unexpectedly, Hut 8 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 Hut 8 will offset losses from the drop in Hut 8's long position.

The idea behind CryptoStar Corp and Hut 8 Mining 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..