Correlation Between DigiByte and Hive

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

Diversification Opportunities for DigiByte and Hive

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between DigiByte and Hive is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding DigiByte and Hive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hive and DigiByte 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 DigiByte are associated (or correlated) with Hive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hive has no effect on the direction of DigiByte i.e., DigiByte and Hive go up and down completely randomly.

Pair Corralation between DigiByte and Hive

Assuming the 90 days trading horizon DigiByte is expected to generate 1.41 times less return on investment than Hive. In addition to that, DigiByte is 1.0 times more volatile than Hive. It trades about 0.11 of its total potential returns per unit of risk. Hive is currently generating about 0.16 per unit of volatility. If you would invest  35.00  in Hive on December 29, 2023 and sell it today you would earn a total of  7.00  from holding Hive or generate 20.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

DigiByte  vs.  Hive

 Performance 
       Timeline  
DigiByte 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in DigiByte are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, DigiByte exhibited solid returns over the last few months and may actually be approaching a breakup point.
Hive 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hive are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Hive exhibited solid returns over the last few months and may actually be approaching a breakup point.

DigiByte and Hive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DigiByte and Hive

The main advantage of trading using opposite DigiByte and Hive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigiByte position performs unexpectedly, Hive 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 Hive will offset losses from the drop in Hive's long position.
The idea behind DigiByte and Hive 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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