Correlation Between Marathon Digital and United States
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and United States 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 United States 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 United States 12, you can compare the effects of market volatilities on Marathon Digital and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and United States.
Diversification Opportunities for Marathon Digital and United States
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marathon and United is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and United States 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States 12 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States 12 has no effect on the direction of Marathon Digital i.e., Marathon Digital and United States go up and down completely randomly.
Pair Corralation between Marathon Digital and United States
Given the investment horizon of 90 days Marathon Digital Holdings is expected to under-perform the United States. In addition to that, Marathon Digital is 4.47 times more volatile than United States 12. It trades about -0.45 of its total potential returns per unit of risk. United States 12 is currently generating about 0.11 per unit of volatility. If you would invest 3,938 in United States 12 on January 20, 2024 and sell it today you would earn a total of 79.00 from holding United States 12 or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Digital Holdings vs. United States 12
Performance |
| Timeline |
| Marathon Digital Holdings |
| United States 12 |
Marathon Digital and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and United States
The main advantage of trading using opposite Marathon Digital and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Marathon Digital vs. Pluri Inc | Marathon Digital vs. BioLineRx | Marathon Digital vs. Purple Biotech | Marathon Digital vs. Pmv PharmaceuticalsInc |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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