Correlation Between Marathon Digital and Netcapital
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Netcapital 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 Netcapital 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 Netcapital, you can compare the effects of market volatilities on Marathon Digital and Netcapital 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 Netcapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Netcapital.
Diversification Opportunities for Marathon Digital and Netcapital
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marathon and Netcapital is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Netcapital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcapital 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 Netcapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcapital has no effect on the direction of Marathon Digital i.e., Marathon Digital and Netcapital go up and down completely randomly.
Pair Corralation between Marathon Digital and Netcapital
Given the investment horizon of 90 days Marathon Digital Holdings is expected to under-perform the Netcapital. But the stock apears to be less risky and, when comparing its historical volatility, Marathon Digital Holdings is 1.17 times less risky than Netcapital. The stock trades about -0.26 of its potential returns per unit of risk. The Netcapital is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Netcapital on November 18, 2024 and sell it today you would earn a total of 53.00 from holding Netcapital or generate 27.89% 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. Netcapital
Performance |
| Timeline |
| Marathon Digital Holdings |
| Netcapital |
Marathon Digital and Netcapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and Netcapital
The main advantage of trading using opposite Marathon Digital and Netcapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Netcapital 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 Netcapital will offset losses from the drop in Netcapital's long position.| Marathon Digital vs. Hut 8 Corp | Marathon Digital vs. CleanSpark | Marathon Digital vs. Bit Digital | Marathon Digital vs. Bitfarms |
| Netcapital vs. Applied Digital | Netcapital vs. Zhong Yang Financial | Netcapital vs. Magic Empire Global | Netcapital 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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