Correlation Between Schiehallion and Bitfarms

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

Diversification Opportunities for Schiehallion and Bitfarms

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Schiehallion and Bitfarms is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Schiehallion and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and Schiehallion 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 Schiehallion are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Schiehallion i.e., Schiehallion and Bitfarms go up and down completely randomly.

Pair Corralation between Schiehallion and Bitfarms

Assuming the 90 days trading horizon Schiehallion is expected to under-perform the Bitfarms. But the stock apears to be less risky and, when comparing its historical volatility, Schiehallion is 7.04 times less risky than Bitfarms. The stock trades about -0.07 of its potential returns per unit of risk. The Bitfarms is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  134.00  in Bitfarms on September 1, 2025 and sell it today you would earn a total of  214.00  from holding Bitfarms or generate 159.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.97%
ValuesDaily Returns

Schiehallion  vs.  Bitfarms

 Performance 
       Timeline  
Schiehallion 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Schiehallion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Schiehallion is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Bitfarms 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bitfarms are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Bitfarms reported solid returns over the last few months and may actually be approaching a breakup point.

Schiehallion and Bitfarms Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Schiehallion and Bitfarms

The main advantage of trading using opposite Schiehallion and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schiehallion position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.
The idea behind Schiehallion and Bitfarms 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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