Correlation Between NSAV Holding and Galaxy Digital

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

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

Diversification Opportunities for NSAV Holding and Galaxy Digital

-0.57

Correlation Coefficient

NSAV Holding  Galaxy Digital

Excellent diversification

The 3 months correlation between NSAV and Galaxy is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NSAV Holding 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 NSAV Holding 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 NSAV Holding 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 NSAV Holding i.e., NSAV Holding and Galaxy Digital go up and down completely randomly.

Pair Corralation between NSAV Holding and Galaxy Digital

Given the investment horizon of 90 days NSAV Holding is expected to generate 3.57 times more return on investment than Galaxy Digital. However, NSAV Holding is 3.57 times more volatile than Galaxy Digital Holdings. It trades about 0.07 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  0.06  in NSAV Holding on December 28, 2024 and sell it today you would lose (0.01) from holding NSAV Holding or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

NSAV Holding  vs.  Galaxy Digital Holdings

NSAV Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NSAV Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NSAV Holding showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with NSAV Holding and Galaxy Digital

The main advantage of trading using opposite NSAV Holding and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSAV Holding 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 NSAV Holding 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.