Correlation Between Charles Schwab and Marathon Digital
Can any of the company-specific risk be diversified away by investing in both Charles Schwab 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 Charles Schwab and Marathon Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Charles Schwab and Marathon Digital Holdings, you can compare the effects of market volatilities on Charles Schwab 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 Charles Schwab with a short position of Marathon Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Schwab and Marathon Digital.
Diversification Opportunities for Charles Schwab and Marathon Digital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charles and Marathon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Charles Schwab 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 Charles Schwab 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 The Charles Schwab 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 Charles Schwab i.e., Charles Schwab and Marathon Digital go up and down completely randomly.
Pair Corralation between Charles Schwab and Marathon Digital
Assuming the 90 days trading horizon The Charles Schwab is expected to generate 0.06 times more return on investment than Marathon Digital. However, The Charles Schwab is 16.51 times less risky than Marathon Digital. It trades about 0.04 of its potential returns per unit of risk. Marathon Digital Holdings is currently generating about -0.48 per unit of risk. If you would invest 2,510 in The Charles Schwab on November 28, 2024 and sell it today you would earn a total of 5.00 from holding The Charles Schwab or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Charles Schwab vs. Marathon Digital Holdings
Performance |
| Timeline |
| Charles Schwab |
| Marathon Digital Holdings |
Charles Schwab and Marathon Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charles Schwab and Marathon Digital
The main advantage of trading using opposite Charles Schwab and Marathon Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charles Schwab 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.| Charles Schwab vs. The Goldman Sachs | Charles Schwab vs. Morgan Stanley | Charles Schwab vs. The Goldman Sachs | Charles Schwab vs. Morgan Stanley |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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