Correlation Between Argo Blockchain and Marathon Digital

Can any of the company-specific risk be diversified away by investing in both Argo Blockchain 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 Argo Blockchain and Marathon Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Argo Blockchain PLC and Marathon Digital Holdings, you can compare the effects of market volatilities on Argo Blockchain 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 Argo Blockchain with a short position of Marathon Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Blockchain and Marathon Digital.

Diversification Opportunities for Argo Blockchain and Marathon Digital

0.0

Correlation Coefficient

Argo Blockchain  Marathon Digital

Pay attention - limited upside

The 3 months correlation between Argo and Marathon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Argo Blockchain PLC 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 Argo Blockchain 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 Argo Blockchain PLC 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 Argo Blockchain i.e., Argo Blockchain and Marathon Digital go up and down completely randomly.

Pair Corralation between Argo Blockchain and Marathon Digital

Assuming the 90 days horizon Argo Blockchain is expected to generate 1.83 times less return on investment than Marathon Digital. In addition to that, Argo Blockchain is 1.47 times more volatile than Marathon Digital Holdings. It trades about 0.02 of its total potential returns per unit of risk. Marathon Digital Holdings is currently generating about 0.06 per unit of volatility. If you would invest  707.00  in Marathon Digital Holdings on October 25, 2024 and sell it today you would earn a total of  1,262  from holding Marathon Digital Holdings or generate 178.5% return on investment over 90 days.

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

Argo Blockchain PLC  vs.  Marathon Digital Holdings

Argo Blockchain PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argo Blockchain PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marathon Digital Holdings

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Digital Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Marathon Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argo Blockchain and Marathon Digital

The main advantage of trading using opposite Argo Blockchain and Marathon Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Blockchain 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.

The idea behind Argo Blockchain PLC and Marathon Digital Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.