Correlation Between Galaxy Digital and Apple
Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and Apple 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 Apple 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 Apple Inc CDR, you can compare the effects of market volatilities on Galaxy Digital and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and Apple.
Diversification Opportunities for Galaxy Digital and Apple
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galaxy and Apple is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and Apple go up and down completely randomly.
Pair Corralation between Galaxy Digital and Apple
Assuming the 90 days trading horizon Galaxy Digital Holdings is expected to generate 8.63 times more return on investment than Apple. However, Galaxy Digital is 8.63 times more volatile than Apple Inc CDR. It trades about 0.36 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.47 per unit of risk. If you would invest 1,625 in Galaxy Digital Holdings on September 5, 2024 and sell it today you would earn a total of 1,146 from holding Galaxy Digital Holdings or generate 70.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Digital Holdings vs. Apple Inc CDR
Performance |
| Timeline |
| Galaxy Digital Holdings |
| Apple Inc CDR |
Galaxy Digital and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Digital and Apple
The main advantage of trading using opposite Galaxy Digital and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Galaxy Digital vs. Apple Inc CDR | Galaxy Digital vs. Berkshire Hathaway CDR | Galaxy Digital vs. Microsoft Corp CDR | Galaxy Digital vs. Alphabet Inc CDR |
| Apple vs. Rogers Communications | Apple vs. Maple Leaf Foods | Apple vs. Questor Technology | Apple vs. Nicola Mining |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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