Correlation Between Stronghold Digital and Eneos Holdings

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

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

Diversification Opportunities for Stronghold Digital and Eneos Holdings

-0.33

Correlation Coefficient

Stronghold Digital  Eneos Holdings

Very good diversification

The 3 months correlation between Stronghold and Eneos is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and Eneos Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneos Holdings ADR and Stronghold Digital 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 Stronghold Digital Mining are associated (or correlated) with Eneos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneos Holdings ADR has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and Eneos Holdings go up and down completely randomly.

Pair Corralation between Stronghold Digital and Eneos Holdings

Given the investment horizon of 90 days Stronghold Digital Mining is expected to generate 1.08 times more return on investment than Eneos Holdings. However, Stronghold Digital is 1.08 times more volatile than Eneos Holdings ADR. It trades about 0.05 of its potential returns per unit of risk. Eneos Holdings ADR is currently generating about 0.02 per unit of risk. If you would invest  444.00  in Stronghold Digital Mining on September 16, 2024 and sell it today you would earn a total of  35.00  from holding Stronghold Digital Mining or generate 7.88% return on investment over 90 days.

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

Stronghold Digital Mining  vs.  Eneos Holdings ADR

Stronghold Digital Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stronghold Digital Mining are ranked lower than 3 (%) 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.

Eneos Holdings ADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eneos Holdings ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Eneos Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stronghold Digital and Eneos Holdings

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

The idea behind Stronghold Digital Mining and Eneos Holdings ADR 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.