Correlation Between Enbridge H and Hut 8

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Can any of the company-specific risk be diversified away by investing in both Enbridge H 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 Enbridge H and Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge H Cum and Hut 8 Mining, you can compare the effects of market volatilities on Enbridge H 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 Enbridge H with a short position of Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge H and Hut 8.

Diversification Opportunities for Enbridge H and Hut 8

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Enbridge and Hut is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge H Cum 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 Enbridge H 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 Enbridge H Cum 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 Enbridge H i.e., Enbridge H and Hut 8 go up and down completely randomly.

Pair Corralation between Enbridge H and Hut 8

Assuming the 90 days trading horizon Enbridge H is expected to generate 59.5 times less return on investment than Hut 8. But when comparing it to its historical volatility, Enbridge H Cum is 17.06 times less risky than Hut 8. It trades about 0.06 of its potential returns per unit of risk. Hut 8 Mining is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,556  in Hut 8 Mining on October 1, 2024 and sell it today you would earn a total of  1,665  from holding Hut 8 Mining or generate 107.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Enbridge H Cum  vs.  Hut 8 Mining

 Performance 
       Timeline  
Enbridge H Cum 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge H Cum are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Enbridge H is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Hut 8 Mining 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Hut 8 Mining are ranked lower than 15 (%) 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.

Enbridge H and Hut 8 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enbridge H and Hut 8

The main advantage of trading using opposite Enbridge H and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge H 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 Enbridge H Cum 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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