Correlation Between BTCS and CleanSpark

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

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

Diversification Opportunities for BTCS and CleanSpark

0.12

Correlation Coefficient

BTCS  CleanSpark

Average diversification

The 3 months correlation between BTCS and CleanSpark is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BTCS Inc and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and BTCS 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 BTCS Inc are associated (or correlated) with CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of BTCS i.e., BTCS and CleanSpark go up and down completely randomly.

Pair Corralation between BTCS and CleanSpark

Given the investment horizon of 90 days BTCS is expected to generate 3.22 times less return on investment than CleanSpark. But when comparing it to its historical volatility, BTCS Inc is 1.03 times less risky than CleanSpark. It trades about 0.02 of its potential returns per unit of risk. CleanSpark is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  576.00  in CleanSpark on February 24, 2024 and sell it today you would earn a total of  1,133  from holding CleanSpark or generate 196.7% return on investment over 90 days.

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

BTCS Inc  vs.  CleanSpark

BTCS Inc

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BTCS Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, BTCS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CleanSpark

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days CleanSpark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CleanSpark is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BTCS and CleanSpark

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

The idea behind BTCS Inc and CleanSpark 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.