Correlation Between DeFi Technologies and Galaxy Digital
Can any of the company-specific risk be diversified away by investing in both DeFi Technologies 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 DeFi Technologies and Galaxy Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeFi Technologies and Galaxy Digital Holdings, you can compare the effects of market volatilities on DeFi Technologies 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 DeFi Technologies with a short position of Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeFi Technologies and Galaxy Digital.
Diversification Opportunities for DeFi Technologies and Galaxy Digital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DeFi and Galaxy is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding DeFi Technologies 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 DeFi Technologies 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 DeFi Technologies 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 DeFi Technologies i.e., DeFi Technologies and Galaxy Digital go up and down completely randomly.
Pair Corralation between DeFi Technologies and Galaxy Digital
Assuming the 90 days horizon DeFi Technologies is expected to generate 1.28 times more return on investment than Galaxy Digital. However, DeFi Technologies is 1.28 times more volatile than Galaxy Digital Holdings. It trades about 0.17 of its potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.21 per unit of risk. If you would invest 274.00 in DeFi Technologies on October 22, 2024 and sell it today you would earn a total of 40.00 from holding DeFi Technologies or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeFi Technologies vs. Galaxy Digital Holdings
Performance |
| Timeline |
| DeFi Technologies |
| Galaxy Digital Holdings |
DeFi Technologies and Galaxy Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeFi Technologies and Galaxy Digital
The main advantage of trading using opposite DeFi Technologies and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeFi Technologies 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.| DeFi Technologies vs. Argo Blockchain PLC | DeFi Technologies vs. DigiMax Global | DeFi Technologies vs. Galaxy Digital Holdings | DeFi Technologies vs. BIG Blockchain Intelligence |
| Galaxy Digital vs. DeFi Technologies | Galaxy Digital vs. Argo Blockchain PLC | Galaxy Digital vs. DigiMax Global | Galaxy Digital vs. BIG Blockchain Intelligence |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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