Correlation Between Marathon Digital and Woodbrook Group
Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Woodbrook Group 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 Woodbrook Group 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 Woodbrook Group Holdings, you can compare the effects of market volatilities on Marathon Digital and Woodbrook Group 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 Woodbrook Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Woodbrook Group.
Diversification Opportunities for Marathon Digital and Woodbrook Group
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marathon and Woodbrook is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Woodbrook Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodbrook Group 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 Woodbrook Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodbrook Group Holdings has no effect on the direction of Marathon Digital i.e., Marathon Digital and Woodbrook Group go up and down completely randomly.
Pair Corralation between Marathon Digital and Woodbrook Group
Given the investment horizon of 90 days Marathon Digital Holdings is expected to under-perform the Woodbrook Group. But the stock apears to be less risky and, when comparing its historical volatility, Marathon Digital Holdings is 13.99 times less risky than Woodbrook Group. The stock trades about -0.01 of its potential returns per unit of risk. The Woodbrook Group Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Woodbrook Group Holdings on November 28, 2024 and sell it today you would lose (0.10) from holding Woodbrook Group Holdings or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.03% |
| Values | Daily Returns |
Marathon Digital Holdings vs. Woodbrook Group Holdings
Performance |
| Timeline |
| Marathon Digital Holdings |
| Woodbrook Group Holdings |
Marathon Digital and Woodbrook Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Digital and Woodbrook Group
The main advantage of trading using opposite Marathon Digital and Woodbrook Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Woodbrook Group 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 Woodbrook Group will offset losses from the drop in Woodbrook Group'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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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