Correlation Between Marathon Digital and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Morgan Stanley 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 Morgan Stanley 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 Morgan Stanley, you can compare the effects of market volatilities on Marathon Digital and Morgan Stanley 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 Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Morgan Stanley.
Diversification Opportunities for Marathon Digital and Morgan Stanley
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marathon and Morgan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley 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 Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley has no effect on the direction of Marathon Digital i.e., Marathon Digital and Morgan Stanley go up and down completely randomly.
Pair Corralation between Marathon Digital and Morgan Stanley
Given the investment horizon of 90 days Marathon Digital is expected to generate 1.35 times less return on investment than Morgan Stanley. In addition to that, Marathon Digital is 3.69 times more volatile than Morgan Stanley. It trades about 0.03 of its total potential returns per unit of risk. Morgan Stanley is currently generating about 0.15 per unit of volatility. If you would invest 8,383 in Morgan Stanley on August 27, 2024 and sell it today you would earn a total of 5,086 from holding Morgan Stanley or generate 60.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Digital Holdings vs. Morgan Stanley
Performance |
| Timeline |
| Marathon Digital Holdings |
| Morgan Stanley |
Marathon Digital and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and Morgan Stanley
The main advantage of trading using opposite Marathon Digital and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| Marathon Digital vs. Hut 8 Corp | Marathon Digital vs. CleanSpark | Marathon Digital vs. Bit Digital | Marathon Digital vs. Bitfarms |
| Morgan Stanley vs. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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