Correlation Between Bitfarms and Sprott
Can any of the company-specific risk be diversified away by investing in both Bitfarms and Sprott 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 Sprott into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Sprott Inc, you can compare the effects of market volatilities on Bitfarms and Sprott 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 Sprott. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Sprott.
Diversification Opportunities for Bitfarms and Sprott
Very poor diversification
The 3 months correlation between Bitfarms and Sprott is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Sprott Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Inc 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 Sprott. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Inc has no effect on the direction of Bitfarms i.e., Bitfarms and Sprott go up and down completely randomly.
Pair Corralation between Bitfarms and Sprott
Assuming the 90 days trading horizon Bitfarms is expected to generate 4.53 times more return on investment than Sprott. However, Bitfarms is 4.53 times more volatile than Sprott Inc. It trades about 0.26 of its potential returns per unit of risk. Sprott Inc is currently generating about 0.17 per unit of risk. If you would invest 175.00 in Bitfarms on July 26, 2025 and sell it today you would earn a total of 407.00 from holding Bitfarms or generate 232.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Sprott Inc
Performance |
| Timeline |
| Bitfarms |
| Sprott Inc |
Bitfarms and Sprott Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Sprott
The main advantage of trading using opposite Bitfarms and Sprott positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, Sprott 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 Sprott will offset losses from the drop in Sprott's long position.| Bitfarms vs. Intact Financ 1 | Bitfarms vs. EQB Inc | Bitfarms vs. Brookfield Business Corp | Bitfarms vs. Hut 8 Mining |
| Sprott vs. Brookfield Business Corp | Sprott vs. First National Financial | Sprott vs. EQB Inc | Sprott vs. Guardian Capital Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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