Correlation Between Marathon Digital and Greenidge Generation
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Greenidge Generation 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 Greenidge Generation 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 Greenidge Generation Holdings, you can compare the effects of market volatilities on Marathon Digital and Greenidge Generation 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 Greenidge Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Greenidge Generation.
Diversification Opportunities for Marathon Digital and Greenidge Generation
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marathon and Greenidge is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Marathon Digital i.e., Marathon Digital and Greenidge Generation go up and down completely randomly.
Pair Corralation between Marathon Digital and Greenidge Generation
Given the investment horizon of 90 days Marathon Digital Holdings is expected to generate 0.79 times more return on investment than Greenidge Generation. However, Marathon Digital Holdings is 1.27 times less risky than Greenidge Generation. It trades about 0.08 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about 0.02 per unit of risk. If you would invest 614.00 in Marathon Digital Holdings on August 24, 2024 and sell it today you would earn a total of 1,989 from holding Marathon Digital Holdings or generate 323.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Digital Holdings vs. Greenidge Generation Holdings
Performance |
| Timeline |
| Marathon Digital Holdings |
| Greenidge Generation |
Marathon Digital and Greenidge Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and Greenidge Generation
The main advantage of trading using opposite Marathon Digital and Greenidge Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Greenidge Generation 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 Greenidge Generation will offset losses from the drop in Greenidge Generation's long position.| Marathon Digital vs. Hut 8 Corp | Marathon Digital vs. CleanSpark | Marathon Digital vs. Bit Digital | Marathon Digital vs. Bitfarms |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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