Correlation Between Marathon Digital and Moelis

Can any of the company-specific risk be diversified away by investing in both Marathon Digital and Moelis 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 Moelis 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 Moelis Co, you can compare the effects of market volatilities on Marathon Digital and Moelis 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 Moelis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Digital and Moelis.

Diversification Opportunities for Marathon Digital and Moelis

0.12

Correlation Coefficient

Marathon Digital  Moelis

Average diversification

The 3 months correlation between Marathon and Moelis is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Marathon Digital i.e., Marathon Digital and Moelis go up and down completely randomly.

Pair Corralation between Marathon Digital and Moelis

Given the investment horizon of 90 days Marathon Digital Holdings is expected to under-perform the Moelis. In addition to that, Marathon Digital is 2.47 times more volatile than Moelis Co. It trades about -0.21 of its total potential returns per unit of risk. Moelis Co is currently generating about -0.22 per unit of volatility. If you would invest  5,617  in Moelis Co on January 31, 2024 and sell it today you would lose (612.00) from holding Moelis Co or give up 10.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Marathon Digital Holdings  vs.  Moelis Co

Marathon Digital Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Digital Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Marathon Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

Moelis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moelis Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Marathon Digital and Moelis

The main advantage of trading using opposite Marathon Digital and Moelis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Digital position performs unexpectedly, Moelis 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 Moelis will offset losses from the drop in Moelis' long position.

The idea behind Marathon Digital Holdings and Moelis Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.