Correlation Between Marathon Digital and Gryphon Digital

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

Diversification Opportunities for Marathon Digital and Gryphon Digital

0.51

Correlation Coefficient

Marathon Digital  Gryphon Digital

Very weak diversification

The 3 months correlation between Marathon and Gryphon is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Digital Holdings and Gryphon Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gryphon Digital Mining 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 Gryphon Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gryphon Digital Mining has no effect on the direction of Marathon Digital i.e., Marathon Digital and Gryphon Digital go up and down completely randomly.

Pair Corralation between Marathon Digital and Gryphon Digital

Given the investment horizon of 90 days Marathon Digital Holdings is expected to generate 0.88 times more return on investment than Gryphon Digital. However, Marathon Digital Holdings is 1.14 times less risky than Gryphon Digital. It trades about -0.06 of its potential returns per unit of risk. Gryphon Digital Mining is currently generating about -0.21 per unit of risk. If you would invest  1,844  in Marathon Digital Holdings on December 27, 2024 and sell it today you would lose (465.00) from holding Marathon Digital Holdings or give up 25.22% of portfolio value over 90 days.

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

Marathon Digital Holdings  vs.  Gryphon Digital Mining

Marathon Digital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marathon Digital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Gryphon Digital Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gryphon Digital Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Marathon Digital and Gryphon Digital

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

The idea behind Marathon Digital Holdings and Gryphon Digital Mining 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.