Correlation Between Stronghold Digital and Schrodinger

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

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

Diversification Opportunities for Stronghold Digital and Schrodinger

0.48

Correlation Coefficient

Stronghold Digital  Schrodinger

Very weak diversification

The 3 months correlation between Stronghold and Schrodinger is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining and Schrodinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schrodinger and Stronghold 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 Stronghold Digital Mining are associated (or correlated) with Schrodinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schrodinger has no effect on the direction of Stronghold Digital i.e., Stronghold Digital and Schrodinger go up and down completely randomly.

Pair Corralation between Stronghold Digital and Schrodinger

Given the investment horizon of 90 days Stronghold Digital Mining is expected to under-perform the Schrodinger. In addition to that, Stronghold Digital is 1.88 times more volatile than Schrodinger. It trades about -0.02 of its total potential returns per unit of risk. Schrodinger is currently generating about 0.02 per unit of volatility. If you would invest  2,523  in Schrodinger on January 17, 2024 and sell it today you would earn a total of  31.00  from holding Schrodinger or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Stronghold Digital Mining  vs.  Schrodinger

Stronghold Digital Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stronghold Digital Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Schrodinger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schrodinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Schrodinger is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Stronghold Digital and Schrodinger

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

The idea behind Stronghold Digital Mining and Schrodinger 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.