Correlation Between Upstart Holdings and Marathon Digital
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings 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 Upstart Holdings and Marathon Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Marathon Digital Holdings, you can compare the effects of market volatilities on Upstart Holdings 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 Upstart Holdings with a short position of Marathon Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Marathon Digital.
Diversification Opportunities for Upstart Holdings and Marathon Digital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Upstart and Marathon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings 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 Upstart Holdings 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 Upstart Holdings 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 Upstart Holdings i.e., Upstart Holdings and Marathon Digital go up and down completely randomly.
Pair Corralation between Upstart Holdings and Marathon Digital
Given the investment horizon of 90 days Upstart Holdings is expected to generate 1.06 times more return on investment than Marathon Digital. However, Upstart Holdings is 1.06 times more volatile than Marathon Digital Holdings. It trades about 0.23 of its potential returns per unit of risk. Marathon Digital Holdings is currently generating about 0.2 per unit of risk. If you would invest 5,198 in Upstart Holdings on August 27, 2024 and sell it today you would earn a total of 2,754 from holding Upstart Holdings or generate 52.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Marathon Digital Holdings
Performance |
| Timeline |
| Upstart Holdings |
| Marathon Digital Holdings |
Upstart Holdings and Marathon Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Marathon Digital
The main advantage of trading using opposite Upstart Holdings and Marathon Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings 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.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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