Correlation Between CryptoStar Corp and Galaxy Digital

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

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

Diversification Opportunities for CryptoStar Corp and Galaxy Digital

0.85

Correlation Coefficient

CryptoStar Corp  Galaxy Digital

Very poor diversification

The 3 months correlation between CryptoStar and Galaxy is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CryptoStar Corp 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 CryptoStar Corp 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 CryptoStar Corp 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 CryptoStar Corp i.e., CryptoStar Corp and Galaxy Digital go up and down completely randomly.

Pair Corralation between CryptoStar Corp and Galaxy Digital

Assuming the 90 days trading horizon CryptoStar Corp is expected to generate 1.07 times less return on investment than Galaxy Digital. In addition to that, CryptoStar Corp is 2.2 times more volatile than Galaxy Digital Holdings. It trades about 0.08 of its total potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.19 per unit of volatility. If you would invest  1,410  in Galaxy Digital Holdings on September 3, 2024 and sell it today you would earn a total of  1,151  from holding Galaxy Digital Holdings or generate 81.63% return on investment over 90 days.

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

CryptoStar Corp  vs.  Galaxy Digital Holdings

CryptoStar Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CryptoStar Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CryptoStar Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Galaxy Digital Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Digital Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Galaxy Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CryptoStar Corp and Galaxy Digital

The main advantage of trading using opposite CryptoStar Corp and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CryptoStar Corp 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 CryptoStar Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.