Correlation Between Terawulf and Galaxy Digital
Can any of the company-specific risk be diversified away by investing in both Terawulf 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 Terawulf and Galaxy Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terawulf and Galaxy Digital Holdings, you can compare the effects of market volatilities on Terawulf 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 Terawulf with a short position of Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terawulf and Galaxy Digital.
Diversification Opportunities for Terawulf and Galaxy Digital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Terawulf and Galaxy is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Terawulf 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 Terawulf 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 Terawulf 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 Terawulf i.e., Terawulf and Galaxy Digital go up and down completely randomly.
Pair Corralation between Terawulf and Galaxy Digital
Given the investment horizon of 90 days Terawulf is expected to generate 1.35 times more return on investment than Galaxy Digital. However, Terawulf is 1.35 times more volatile than Galaxy Digital Holdings. It trades about 0.18 of its potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.1 per unit of risk. If you would invest 205.00 in Terawulf on September 1, 2024 and sell it today you would earn a total of 584.00 from holding Terawulf or generate 284.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terawulf vs. Galaxy Digital Holdings
Performance |
| Timeline |
| Terawulf |
| Galaxy Digital Holdings |
Terawulf and Galaxy Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terawulf and Galaxy Digital
The main advantage of trading using opposite Terawulf and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terawulf 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.| Terawulf vs. Iris Energy | Terawulf vs. Stronghold Digital Mining | Terawulf vs. Argo Blockchain PLC | Terawulf vs. Bitfarms |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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