Correlation Between Galaxy Digital and Bitfarms
Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and Bitfarms 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 Bitfarms 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 Bitfarms, you can compare the effects of market volatilities on Galaxy Digital and Bitfarms 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 Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and Bitfarms.
Diversification Opportunities for Galaxy Digital and Bitfarms
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galaxy and Bitfarms is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms 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 Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and Bitfarms go up and down completely randomly.
Pair Corralation between Galaxy Digital and Bitfarms
Assuming the 90 days trading horizon Galaxy Digital Holdings is expected to generate 0.96 times more return on investment than Bitfarms. However, Galaxy Digital Holdings is 1.04 times less risky than Bitfarms. It trades about 0.16 of its potential returns per unit of risk. Bitfarms is currently generating about -0.01 per unit of risk. If you would invest 1,866 in Galaxy Digital Holdings on August 29, 2024 and sell it today you would earn a total of 459.00 from holding Galaxy Digital Holdings or generate 24.6% 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. Bitfarms
Performance |
| Timeline |
| Galaxy Digital Holdings |
| Bitfarms |
Galaxy Digital and Bitfarms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Digital and Bitfarms
The main advantage of trading using opposite Galaxy Digital and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.| Galaxy Digital vs. Microsoft Corp CDR | Galaxy Digital vs. Apple Inc CDR | Galaxy Digital vs. Alphabet Inc CDR | Galaxy Digital vs. Amazon CDR |
| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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