Correlation Between DigiMax Global and Stronghold Digital

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

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

Diversification Opportunities for DigiMax Global and Stronghold Digital

-0.1

Correlation Coefficient

DigiMax Global  Stronghold Digital

Good diversification

The 3 months correlation between DigiMax and Stronghold is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DigiMax Global and Stronghold Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stronghold Digital Mining and DigiMax Global 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 DigiMax Global are associated (or correlated) with Stronghold Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stronghold Digital Mining has no effect on the direction of DigiMax Global i.e., DigiMax Global and Stronghold Digital go up and down completely randomly.

Pair Corralation between DigiMax Global and Stronghold Digital

Assuming the 90 days horizon DigiMax Global is expected to generate 2.17 times more return on investment than Stronghold Digital. However, DigiMax Global is 2.17 times more volatile than Stronghold Digital Mining. It trades about 0.06 of its potential returns per unit of risk. Stronghold Digital Mining is currently generating about 0.06 per unit of risk. If you would invest  1.01  in DigiMax Global on September 5, 2024 and sell it today you would earn a total of  0.00  from holding DigiMax Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

DigiMax Global  vs.  Stronghold Digital Mining

DigiMax Global

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DigiMax Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DigiMax Global reported solid returns over the last few months and may actually be approaching a breakup point.

Stronghold Digital Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stronghold Digital Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Stronghold Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DigiMax Global and Stronghold Digital

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

The idea behind DigiMax Global and Stronghold Digital 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.