Correlation Between Bitfarms and CryptoStar Corp

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

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

Diversification Opportunities for Bitfarms and CryptoStar Corp

-0.17

Correlation Coefficient

Bitfarms  CryptoStar Corp

Good diversification

The 3 months correlation between Bitfarms and CryptoStar is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and CryptoStar Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryptoStar Corp and Bitfarms 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 Bitfarms are associated (or correlated) with CryptoStar Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryptoStar Corp has no effect on the direction of Bitfarms i.e., Bitfarms and CryptoStar Corp go up and down completely randomly.

Pair Corralation between Bitfarms and CryptoStar Corp

Assuming the 90 days trading horizon Bitfarms is expected to generate 3.09 times less return on investment than CryptoStar Corp. But when comparing it to its historical volatility, Bitfarms is 4.03 times less risky than CryptoStar Corp. It trades about 0.09 of its potential returns per unit of risk. CryptoStar Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2.00  in CryptoStar Corp on April 21, 2025 and sell it today you would lose (0.50) from holding CryptoStar Corp or give up 25.0% of portfolio value over 90 days.

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

Bitfarms  vs.  CryptoStar Corp

Bitfarms

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bitfarms are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bitfarms displayed solid returns over the last few months and may actually be approaching a breakup point.

CryptoStar Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CryptoStar Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CryptoStar Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitfarms and CryptoStar Corp

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

The idea behind Bitfarms and CryptoStar Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.