Correlation Between Galaxy Digital and BIG Blockchain

Can any of the company-specific risk be diversified away by investing in both Galaxy Digital and BIG Blockchain 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 BIG Blockchain 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 BIG Blockchain Intelligence, you can compare the effects of market volatilities on Galaxy Digital and BIG Blockchain 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 BIG Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and BIG Blockchain.

Diversification Opportunities for Galaxy Digital and BIG Blockchain

0.83

Correlation Coefficient

Galaxy Digital  BIG Blockchain

Very poor diversification

The 3 months correlation between Galaxy and BIG is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and BIG Blockchain Intelligence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIG Blockchain Intel 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 BIG Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIG Blockchain Intel has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and BIG Blockchain go up and down completely randomly.

Pair Corralation between Galaxy Digital and BIG Blockchain

Assuming the 90 days horizon Galaxy Digital Holdings is expected to under-perform the BIG Blockchain. But the pink sheet apears to be less risky and, when comparing its historical volatility, Galaxy Digital Holdings is 1.05 times less risky than BIG Blockchain. The pink sheet trades about -0.09 of its potential returns per unit of risk. The BIG Blockchain Intelligence is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  12.00  in BIG Blockchain Intelligence on December 28, 2024 and sell it today you would lose (3.56) from holding BIG Blockchain Intelligence or give up 29.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Galaxy Digital Holdings  vs.  BIG Blockchain Intelligence

Galaxy Digital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Galaxy Digital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BIG Blockchain Intel

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIG Blockchain Intelligence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Galaxy Digital and BIG Blockchain

The main advantage of trading using opposite Galaxy Digital and BIG Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital position performs unexpectedly, BIG Blockchain 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 BIG Blockchain will offset losses from the drop in BIG Blockchain's long position.

The idea behind Galaxy Digital Holdings and BIG Blockchain Intelligence pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.