Correlation Between Galaxy Digital and Grayscale Ethereum
Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and Grayscale Ethereum 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 Grayscale Ethereum 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 Grayscale Ethereum Trust, you can compare the effects of market volatilities on Galaxy Digital and Grayscale Ethereum 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 Grayscale Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and Grayscale Ethereum.
Diversification Opportunities for Galaxy Digital and Grayscale Ethereum
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Galaxy and Grayscale is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Grayscale Ethereum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Ethereum Trust 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 Grayscale Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Ethereum Trust has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and Grayscale Ethereum go up and down completely randomly.
Pair Corralation between Galaxy Digital and Grayscale Ethereum
Assuming the 90 days horizon Galaxy Digital Holdings is expected to generate 1.12 times more return on investment than Grayscale Ethereum. However, Galaxy Digital is 1.12 times more volatile than Grayscale Ethereum Trust. It trades about 0.1 of its potential returns per unit of risk. Grayscale Ethereum Trust is currently generating about 0.07 per unit of risk. If you would invest 613.00 in Galaxy Digital Holdings on August 26, 2024 and sell it today you would earn a total of 1,082 from holding Galaxy Digital Holdings or generate 176.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Digital Holdings vs. Grayscale Ethereum Trust
Performance |
| Timeline |
| Galaxy Digital Holdings |
| Grayscale Ethereum Trust |
Galaxy Digital and Grayscale Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Digital and Grayscale Ethereum
The main advantage of trading using opposite Galaxy Digital and Grayscale Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, Grayscale Ethereum 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 Grayscale Ethereum will offset losses from the drop in Grayscale Ethereum's long position.| Galaxy Digital vs. DeFi Technologies | Galaxy Digital vs. Argo Blockchain PLC | Galaxy Digital vs. DigiMax Global | Galaxy Digital vs. BIG Blockchain Intelligence |
| Grayscale Ethereum vs. Grayscale Bitcoin Trust | Grayscale Ethereum vs. Grayscale Litecoin Trust | Grayscale Ethereum vs. Grayscale Digital Large | Grayscale Ethereum vs. Bitwise 10 Crypto |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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