Correlation Between XTI Aerospace, and Marathon Digital

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

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

Diversification Opportunities for XTI Aerospace, and Marathon Digital

-0.72

Correlation Coefficient

XTI Aerospace,  Marathon Digital

Pay attention - limited upside

The 3 months correlation between XTI and Marathon is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding XTI Aerospace, 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 XTI Aerospace, 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 XTI Aerospace, 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 XTI Aerospace, i.e., XTI Aerospace, and Marathon Digital go up and down completely randomly.

Pair Corralation between XTI Aerospace, and Marathon Digital

Given the investment horizon of 90 days XTI Aerospace, is expected to under-perform the Marathon Digital. In addition to that, XTI Aerospace, is 1.0 times more volatile than Marathon Digital Holdings. It trades about -0.3 of its total potential returns per unit of risk. Marathon Digital Holdings is currently generating about 0.17 per unit of volatility. If you would invest  1,526  in Marathon Digital Holdings on September 1, 2024 and sell it today you would earn a total of  1,216  from holding Marathon Digital Holdings or generate 79.69% return on investment over 90 days.

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

XTI Aerospace,  vs.  Marathon Digital Holdings

XTI Aerospace,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XTI Aerospace, 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 indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Marathon Digital Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Digital Holdings are ranked lower than 13 (%) 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 XTI Aerospace, and Marathon Digital

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

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.