Correlation Between Marathon Digital and HIVE Blockchain

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

Diversification Opportunities for Marathon Digital and HIVE Blockchain

0.8

Correlation Coefficient

Marathon Digital  HIVE Blockchain

Very poor diversification

The 3 months correlation between Marathon and HIVE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and HIVE Blockchain Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIVE Blockchain Tech 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 HIVE Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIVE Blockchain Tech has no effect on the direction of Marathon Digital i.e., Marathon Digital and HIVE Blockchain go up and down completely randomly.

Pair Corralation between Marathon Digital and HIVE Blockchain

Given the investment horizon of 90 days Marathon Digital is expected to generate 6.95 times less return on investment than HIVE Blockchain. But when comparing it to its historical volatility, Marathon Digital Holdings is 1.16 times less risky than HIVE Blockchain. It trades about 0.02 of its potential returns per unit of risk. HIVE Blockchain Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  261.00  in HIVE Blockchain Technologies on August 7, 2024 and sell it today you would earn a total of  78.00  from holding HIVE Blockchain Technologies or generate 29.89% return on investment over 90 days.

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

Marathon Digital Holdings  vs.  HIVE Blockchain Technologies

Marathon Digital Holdings

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Digital Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Marathon Digital is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

HIVE Blockchain Tech

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HIVE Blockchain Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, HIVE Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marathon Digital and HIVE Blockchain

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

The idea behind Marathon Digital Holdings and HIVE Blockchain Technologies 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 Commodity Directory module to find actively traded commodities issued by global exchanges.