Correlation Between Marathon Digital and MarketAxess Holdings
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and MarketAxess Holdings 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 MarketAxess Holdings 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 MarketAxess Holdings, you can compare the effects of market volatilities on Marathon Digital and MarketAxess Holdings 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 MarketAxess Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and MarketAxess Holdings.
Diversification Opportunities for Marathon Digital and MarketAxess Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marathon and MarketAxess is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings 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 MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of Marathon Digital i.e., Marathon Digital and MarketAxess Holdings go up and down completely randomly.
Pair Corralation between Marathon Digital and MarketAxess Holdings
Given the investment horizon of 90 days Marathon Digital Holdings is expected to generate 9.25 times more return on investment than MarketAxess Holdings. However, Marathon Digital is 9.25 times more volatile than MarketAxess Holdings. It trades about 0.2 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about -0.4 per unit of risk. If you would invest 1,822 in Marathon Digital Holdings on August 25, 2024 and sell it today you would earn a total of 782.50 from holding Marathon Digital Holdings or generate 42.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Marathon Digital Holdings vs. MarketAxess Holdings
Performance |
| Timeline |
| Marathon Digital Holdings |
| MarketAxess Holdings |
Marathon Digital and MarketAxess Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and MarketAxess Holdings
The main advantage of trading using opposite Marathon Digital and MarketAxess Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, MarketAxess Holdings 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 MarketAxess Holdings will offset losses from the drop in MarketAxess Holdings' long position.| Marathon Digital vs. Hut 8 Corp | Marathon Digital vs. CleanSpark | Marathon Digital vs. Bit Digital | Marathon Digital vs. Bitfarms |
| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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