Correlation Between Amazon CDR and Galaxy Digital
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Galaxy 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 Amazon CDR and Galaxy Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Galaxy Digital Holdings, you can compare the effects of market volatilities on Amazon CDR and Galaxy 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 Amazon CDR with a short position of Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Galaxy Digital.
Diversification Opportunities for Amazon CDR and Galaxy Digital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amazon and Galaxy is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Galaxy Digital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Digital Holdings and Amazon CDR 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 Amazon CDR are associated (or correlated) with Galaxy Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Digital Holdings has no effect on the direction of Amazon CDR i.e., Amazon CDR and Galaxy Digital go up and down completely randomly.
Pair Corralation between Amazon CDR and Galaxy Digital
Assuming the 90 days trading horizon Amazon CDR is expected to generate 5.07 times less return on investment than Galaxy Digital. But when comparing it to its historical volatility, Amazon CDR is 3.38 times less risky than Galaxy Digital. It trades about 0.14 of its potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,765 in Galaxy Digital Holdings on August 24, 2024 and sell it today you would earn a total of 603.00 from holding Galaxy Digital Holdings or generate 34.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Galaxy Digital Holdings
Performance |
| Timeline |
| Amazon CDR |
| Galaxy Digital Holdings |
Amazon CDR and Galaxy Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Galaxy Digital
The main advantage of trading using opposite Amazon CDR and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Galaxy 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 Galaxy Digital will offset losses from the drop in Galaxy Digital's long position.| Amazon CDR vs. Quorum Information Technologies | Amazon CDR vs. Quisitive Technology Solutions | Amazon CDR vs. Canadian Utilities Limited | Amazon CDR vs. Information Services |
| Galaxy Digital vs. Hut 8 Mining | Galaxy Digital vs. HIVE Blockchain Technologies | Galaxy Digital vs. Dmg Blockchain Solutions | Galaxy Digital vs. CryptoStar Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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