Correlation Between Marathon Digital and Applied Blockchain
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Applied Blockchain 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 Applied Blockchain 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 Applied Blockchain, you can compare the effects of market volatilities on Marathon Digital and Applied Blockchain 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 Applied Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Applied Blockchain.
Diversification Opportunities for Marathon Digital and Applied Blockchain
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Marathon and Applied is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Applied Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Blockchain 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 Applied Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Blockchain has no effect on the direction of Marathon Digital i.e., Marathon Digital and Applied Blockchain go up and down completely randomly.
Pair Corralation between Marathon Digital and Applied Blockchain
Given the investment horizon of 90 days Marathon Digital Holdings is expected to generate 1.49 times more return on investment than Applied Blockchain. However, Marathon Digital is 1.49 times more volatile than Applied Blockchain. It trades about 0.17 of its potential returns per unit of risk. Applied Blockchain is currently generating about 0.04 per unit of risk. If you would invest 1,807 in Marathon Digital Holdings on August 24, 2024 and sell it today you would earn a total of 611.00 from holding Marathon Digital Holdings or generate 33.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Digital Holdings vs. Applied Blockchain
Performance |
| Timeline |
| Marathon Digital Holdings |
| Applied Blockchain |
Marathon Digital and Applied Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and Applied Blockchain
The main advantage of trading using opposite Marathon Digital and Applied Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Applied Blockchain 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 Applied Blockchain will offset losses from the drop in Applied Blockchain's long position.| Marathon Digital vs. Hut 8 Corp | Marathon Digital vs. CleanSpark | Marathon Digital vs. Bit Digital | Marathon Digital vs. Bitfarms |
| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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