Correlation Between Netcapital and Marathon Digital
Can any of the company-specific risk be diversified away by investing in both Netcapital and Marathon Digital 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 Netcapital and Marathon Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netcapital and Marathon Digital Holdings, you can compare the effects of market volatilities on Netcapital and Marathon Digital 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 Netcapital with a short position of Marathon Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netcapital and Marathon Digital.
Diversification Opportunities for Netcapital and Marathon Digital
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netcapital and Marathon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Netcapital and Marathon Digital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Digital Holdings and Netcapital 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 Netcapital are associated (or correlated) with Marathon Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Digital Holdings has no effect on the direction of Netcapital i.e., Netcapital and Marathon Digital go up and down completely randomly.
Pair Corralation between Netcapital and Marathon Digital
Given the investment horizon of 90 days Netcapital is expected to under-perform the Marathon Digital. In addition to that, Netcapital is 1.16 times more volatile than Marathon Digital Holdings. It trades about -0.08 of its total potential returns per unit of risk. Marathon Digital Holdings is currently generating about 0.07 per unit of volatility. If you would invest 1,238 in Marathon Digital Holdings on August 24, 2024 and sell it today you would earn a total of 1,180 from holding Marathon Digital Holdings or generate 95.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netcapital vs. Marathon Digital Holdings
Performance |
| Timeline |
| Netcapital |
| Marathon Digital Holdings |
Netcapital and Marathon Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netcapital and Marathon Digital
The main advantage of trading using opposite Netcapital and Marathon Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netcapital position performs unexpectedly, Marathon Digital 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 Marathon Digital will offset losses from the drop in Marathon Digital's long position.| Netcapital vs. Applied Blockchain | Netcapital vs. Zhong Yang Financial | Netcapital vs. Magic Empire Global | Netcapital vs. Lazard |
| Marathon Digital vs. Hut 8 Corp | Marathon Digital vs. CleanSpark | Marathon Digital vs. Bit Digital | Marathon Digital vs. Bitfarms |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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