Correlation Between Neptune Digital and Hut 8

Can any of the company-specific risk be diversified away by investing in both Neptune Digital 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 Neptune Digital and Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Neptune Digital Assets and Hut 8 Mining, you can compare the effects of market volatilities on Neptune Digital 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 Neptune Digital with a short position of Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neptune Digital and Hut 8.

Diversification Opportunities for Neptune Digital and Hut 8

-0.25

Correlation Coefficient

Neptune Digital  Hut 8

Very good diversification

The 3 months correlation between Neptune and Hut is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Neptune Digital Assets 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 Neptune 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 Neptune Digital Assets 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 Neptune Digital i.e., Neptune Digital and Hut 8 go up and down completely randomly.

Pair Corralation between Neptune Digital and Hut 8

Assuming the 90 days horizon Neptune Digital is expected to generate 3.89 times less return on investment than Hut 8. In addition to that, Neptune Digital is 1.17 times more volatile than Hut 8 Mining. It trades about 0.04 of its total potential returns per unit of risk. Hut 8 Mining is currently generating about 0.18 per unit of volatility. If you would invest  1,787  in Hut 8 Mining on April 24, 2025 and sell it today you would earn a total of  1,124  from holding Hut 8 Mining or generate 62.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Neptune Digital Assets  vs.  Hut 8 Mining

Neptune Digital Assets

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neptune Digital Assets are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Neptune Digital showed solid returns over the last few months and may actually be approaching a breakup point.

Hut 8 Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hut 8 Mining are ranked lower than 14 (%) 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.

Pair Trading with Neptune Digital and Hut 8

The main advantage of trading using opposite Neptune Digital and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neptune Digital 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 Neptune Digital Assets 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..