Correlation Between Galaxy Digital and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and BitFrontier Capital 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 Galaxy Digital and BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Digital Holdings and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Galaxy Digital and BitFrontier Capital 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 Galaxy Digital with a short position of BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and BitFrontier Capital.
Diversification Opportunities for Galaxy Digital and BitFrontier Capital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galaxy and BitFrontier is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital and Galaxy 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 Galaxy Digital Holdings are associated (or correlated) with BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Galaxy Digital and BitFrontier Capital
Assuming the 90 days horizon Galaxy Digital Holdings is expected to generate 0.44 times more return on investment than BitFrontier Capital. However, Galaxy Digital Holdings is 2.29 times less risky than BitFrontier Capital. It trades about 0.09 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.03 per unit of risk. If you would invest 304.00 in Galaxy Digital Holdings on August 30, 2024 and sell it today you would earn a total of 1,478 from holding Galaxy Digital Holdings or generate 486.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Galaxy Digital Holdings vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Galaxy Digital Holdings |
| BitFrontier Capital |
Galaxy Digital and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Digital and BitFrontier Capital
The main advantage of trading using opposite Galaxy Digital and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, BitFrontier Capital 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.| Galaxy Digital vs. SPENN Technology AS | Galaxy Digital vs. OFX Group Ltd | Galaxy Digital vs. Cypherpunk Holdings | Galaxy Digital vs. Cathedra Bitcoin |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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