Correlation Between Galaxy Digital and Slate Grocery

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

Diversification Opportunities for Galaxy Digital and Slate Grocery

0.21

Correlation Coefficient

Galaxy Digital  Slate Grocery

Modest diversification

The 3 months correlation between Galaxy and Slate is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Galaxy Digital i.e., Galaxy Digital and Slate Grocery go up and down completely randomly.

Pair Corralation between Galaxy Digital and Slate Grocery

Assuming the 90 days trading horizon Galaxy Digital Holdings is expected to under-perform the Slate Grocery. In addition to that, Galaxy Digital is 3.84 times more volatile than Slate Grocery REIT. It trades about 0.0 of its total potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.08 per unit of volatility. If you would invest  1,002  in Slate Grocery REIT on September 20, 2024 and sell it today you would earn a total of  23.00  from holding Slate Grocery REIT or generate 2.3% return on investment over 90 days.

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

Galaxy Digital Holdings  vs.  Slate Grocery REIT

Galaxy Digital Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Digital Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Galaxy Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Slate Grocery REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slate Grocery REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Galaxy Digital and Slate Grocery

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

The idea behind Galaxy Digital Holdings and Slate Grocery REIT 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 Stocks Directory module to find actively traded stocks across global markets.