Correlation Between Bitfarms and Galaxy Digital
Can any of the company-specific risk be diversified away by investing in both Bitfarms 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 Bitfarms and Galaxy Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Galaxy Digital Holdings, you can compare the effects of market volatilities on Bitfarms 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 Bitfarms with a short position of Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Galaxy Digital.
Diversification Opportunities for Bitfarms and Galaxy Digital
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitfarms and Galaxy is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms 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 Bitfarms 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 Bitfarms 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 Bitfarms i.e., Bitfarms and Galaxy Digital go up and down completely randomly.
Pair Corralation between Bitfarms and Galaxy Digital
Assuming the 90 days trading horizon Bitfarms is expected to generate 17.93 times less return on investment than Galaxy Digital. In addition to that, Bitfarms is 1.02 times more volatile than Galaxy Digital Holdings. It trades about 0.01 of its total potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.19 per unit of volatility. If you would invest 1,866 in Galaxy Digital Holdings on August 28, 2024 and sell it today you would earn a total of 546.00 from holding Galaxy Digital Holdings or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Galaxy Digital Holdings
Performance |
| Timeline |
| Bitfarms |
| Galaxy Digital Holdings |
Bitfarms and Galaxy Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Galaxy Digital
The main advantage of trading using opposite Bitfarms and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms 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.| Bitfarms vs. Hut 8 Mining | Bitfarms vs. Bitfarms | Bitfarms vs. Dmg Blockchain Solutions | Bitfarms vs. Galaxy Digital Holdings |
| Galaxy Digital vs. Telus Corp | Galaxy Digital vs. Toronto Dominion Bank | Galaxy Digital vs. Manulife Financial Corp | Galaxy Digital vs. Canadian Natural Resources |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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