Correlation Between CleanSpark and Galaxy Digital

Can any of the company-specific risk be diversified away by investing in both CleanSpark 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 CleanSpark and Galaxy Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CleanSpark and Galaxy Digital Holdings, you can compare the effects of market volatilities on CleanSpark 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 CleanSpark with a short position of Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanSpark and Galaxy Digital.

Diversification Opportunities for CleanSpark and Galaxy Digital

0.5

Correlation Coefficient

CleanSpark  Galaxy Digital

Very weak diversification

The 3 months correlation between CleanSpark and Galaxy is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CleanSpark 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 CleanSpark 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 CleanSpark 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 CleanSpark i.e., CleanSpark and Galaxy Digital go up and down completely randomly.

Pair Corralation between CleanSpark and Galaxy Digital

Given the investment horizon of 90 days CleanSpark is expected to generate 1.35 times more return on investment than Galaxy Digital. However, CleanSpark is 1.35 times more volatile than Galaxy Digital Holdings. It trades about 0.08 of its potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.09 per unit of risk. If you would invest  249.00  in CleanSpark on October 10, 2024 and sell it today you would earn a total of  822.00  from holding CleanSpark or generate 330.12% return on investment over 90 days.

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

CleanSpark  vs.  Galaxy Digital Holdings

CleanSpark

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Galaxy Digital Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Digital Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Galaxy Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CleanSpark and Galaxy Digital

The main advantage of trading using opposite CleanSpark and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanSpark 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.

The idea behind CleanSpark and Galaxy Digital Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.