Correlation Between EBullion and Galaxy Digital

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

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

Diversification Opportunities for EBullion and Galaxy Digital

-0.81

Correlation Coefficient

EBullion  Galaxy Digital

Pay attention - limited upside

The 3 months correlation between EBullion and Galaxy is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding EBullion 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 EBullion 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 EBullion 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 EBullion i.e., EBullion and Galaxy Digital go up and down completely randomly.

Pair Corralation between EBullion and Galaxy Digital

If you would invest  1,060  in Galaxy Digital Holdings on September 4, 2024 and sell it today you would earn a total of  751.00  from holding Galaxy Digital Holdings or generate 70.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

EBullion  vs.  Galaxy Digital Holdings

EBullion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EBullion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, EBullion is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Galaxy Digital Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Digital Holdings are ranked lower than 14 (%) 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 EBullion and Galaxy Digital

The main advantage of trading using opposite EBullion and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBullion 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 EBullion 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.