Correlation Between Marathon Digital and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Xtrackers California 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 Marathon Digital and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marathon Digital Holdings and Xtrackers California Municipal, you can compare the effects of market volatilities on Marathon Digital and Xtrackers California 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 Marathon Digital with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Xtrackers California.
Diversification Opportunities for Marathon Digital and Xtrackers California
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marathon and Xtrackers is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and Marathon 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 Marathon Digital Holdings are associated (or correlated) with Xtrackers California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers California has no effect on the direction of Marathon Digital i.e., Marathon Digital and Xtrackers California go up and down completely randomly.
Pair Corralation between Marathon Digital and Xtrackers California
Given the investment horizon of 90 days Marathon Digital Holdings is expected to generate 39.15 times more return on investment than Xtrackers California. However, Marathon Digital is 39.15 times more volatile than Xtrackers California Municipal. It trades about 0.04 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about 0.04 per unit of risk. If you would invest 2,268 in Marathon Digital Holdings on December 29, 2023 and sell it today you would lose (10.00) from holding Marathon Digital Holdings or give up 0.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 14.55% |
Values | Daily Returns |
Marathon Digital Holdings vs. Xtrackers California Municipal
Performance |
Timeline |
Marathon Digital Holdings |
Xtrackers California |
Marathon Digital and Xtrackers California Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marathon Digital and Xtrackers California
The main advantage of trading using opposite Marathon Digital and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Xtrackers California 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 Xtrackers California will offset losses from the drop in Xtrackers California's long position.Marathon Digital vs. US GoldMining Common | Marathon Digital vs. Highway Holdings Limited | Marathon Digital vs. Anheuser Busch Inbev | Marathon Digital vs. Ambev SA ADR |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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