Correlation Between Galaxy Digital and Economic Investment
Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and Economic Investment 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 Economic Investment 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 Economic Investment Trust, you can compare the effects of market volatilities on Galaxy Digital and Economic Investment 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 Economic Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and Economic Investment.
Diversification Opportunities for Galaxy Digital and Economic Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Galaxy and Economic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Economic Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Economic Investment 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 Economic Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Economic Investment Trust has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and Economic Investment go up and down completely randomly.
Pair Corralation between Galaxy Digital and Economic Investment
Assuming the 90 days trading horizon Galaxy Digital Holdings is expected to generate 5.33 times more return on investment than Economic Investment. However, Galaxy Digital is 5.33 times more volatile than Economic Investment Trust. It trades about 0.1 of its potential returns per unit of risk. Economic Investment Trust is currently generating about 0.11 per unit of risk. If you would invest 643.00 in Galaxy Digital Holdings on August 28, 2024 and sell it today you would earn a total of 1,769 from holding Galaxy Digital Holdings or generate 275.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Galaxy Digital Holdings vs. Economic Investment Trust
Performance |
| Timeline |
| Galaxy Digital Holdings |
| Economic Investment Trust |
Galaxy Digital and Economic Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Digital and Economic Investment
The main advantage of trading using opposite Galaxy Digital and Economic Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, Economic Investment 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 Economic Investment will offset losses from the drop in Economic Investment's long position.| Galaxy Digital vs. Telus Corp | Galaxy Digital vs. Toronto Dominion Bank | Galaxy Digital vs. Manulife Financial Corp | Galaxy Digital vs. Canadian Natural Resources |
| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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