Correlation Between Terawulf and Tradeweb Markets

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

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

Diversification Opportunities for Terawulf and Tradeweb Markets

0.19

Correlation Coefficient

Terawulf  Tradeweb Markets

Average diversification

The 3 months correlation between Terawulf and Tradeweb is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf and Tradeweb Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradeweb Markets and Terawulf 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 Terawulf are associated (or correlated) with Tradeweb Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradeweb Markets has no effect on the direction of Terawulf i.e., Terawulf and Tradeweb Markets go up and down completely randomly.

Pair Corralation between Terawulf and Tradeweb Markets

Given the investment horizon of 90 days Terawulf is expected to generate 5.84 times more return on investment than Tradeweb Markets. However, Terawulf is 5.84 times more volatile than Tradeweb Markets. It trades about 0.07 of its potential returns per unit of risk. Tradeweb Markets is currently generating about 0.11 per unit of risk. If you would invest  468.00  in Terawulf on September 30, 2024 and sell it today you would earn a total of  85.00  from holding Terawulf or generate 18.16% return on investment over 90 days.

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

Terawulf  vs.  Tradeweb Markets

Terawulf

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Terawulf are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Terawulf reported solid returns over the last few months and may actually be approaching a breakup point.

Tradeweb Markets

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Tradeweb Markets may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Terawulf and Tradeweb Markets

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

The idea behind Terawulf and Tradeweb Markets 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.