Correlation Between Galaxy Digital and Financial
Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and Financial 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 Financial 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 Financial 15 Split, you can compare the effects of market volatilities on Galaxy Digital and Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and Financial.
Diversification Opportunities for Galaxy Digital and Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Galaxy and Financial is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and Financial go up and down completely randomly.
Pair Corralation between Galaxy Digital and Financial
Assuming the 90 days trading horizon Galaxy Digital Holdings is expected to generate 24.42 times more return on investment than Financial. However, Galaxy Digital is 24.42 times more volatile than Financial 15 Split. It trades about 0.26 of its potential returns per unit of risk. Financial 15 Split is currently generating about 0.67 per unit of risk. If you would invest 2,567 in Galaxy Digital Holdings on October 24, 2024 and sell it today you would earn a total of 558.00 from holding Galaxy Digital Holdings or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Digital Holdings vs. Financial 15 Split
Performance |
| Timeline |
| Galaxy Digital Holdings |
| Financial 15 Split |
Galaxy Digital and Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Digital and Financial
The main advantage of trading using opposite Galaxy Digital and Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, Financial 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 Financial will offset losses from the drop in Financial's long position.| Galaxy Digital vs. Hut 8 Mining | Galaxy Digital vs. HIVE Blockchain Technologies | Galaxy Digital vs. Dmg Blockchain Solutions | Galaxy Digital vs. CryptoStar Corp |
| Financial vs. GOLDMAN SACHS CDR | Financial vs. Galaxy Digital Holdings | Financial vs. Hut 8 Mining | Financial vs. Bitfarms |
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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