Correlation Between Stronghold Digital and Marathon Digital
Can any of the company-specific risk be diversified away by investing in both Stronghold Digital 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 Stronghold Digital and Marathon Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stronghold Digital Mining and Marathon Digital Holdings, you can compare the effects of market volatilities on Stronghold Digital 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 Stronghold Digital with a short position of Marathon Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stronghold Digital and Marathon Digital.
Diversification Opportunities for Stronghold Digital and Marathon Digital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stronghold and Marathon is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Stronghold Digital Mining 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 Stronghold 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 Stronghold Digital Mining 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 Stronghold Digital i.e., Stronghold Digital and Marathon Digital go up and down completely randomly.
Pair Corralation between Stronghold Digital and Marathon Digital
Given the investment horizon of 90 days Stronghold Digital is expected to generate 13.35 times less return on investment than Marathon Digital. But when comparing it to its historical volatility, Stronghold Digital Mining is 1.1 times less risky than Marathon Digital. It trades about 0.01 of its potential returns per unit of risk. Marathon Digital Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,729 in Marathon Digital Holdings on August 28, 2024 and sell it today you would earn a total of 913.00 from holding Marathon Digital Holdings or generate 52.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stronghold Digital Mining vs. Marathon Digital Holdings
Performance |
| Timeline |
| Stronghold Digital Mining |
| Marathon Digital Holdings |
Stronghold Digital and Marathon Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stronghold Digital and Marathon Digital
The main advantage of trading using opposite Stronghold Digital and Marathon Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stronghold Digital 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.| Stronghold Digital vs. Terawulf | Stronghold Digital vs. Iris Energy | Stronghold Digital vs. Argo Blockchain PLC | Stronghold Digital vs. Bitfarms |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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