Correlation Between Binance Coin and CHINA CONCH

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

By analyzing existing cross correlation between Binance Coin and CHINA CH VENT, you can compare the effects of market volatilities on Binance Coin and CHINA CONCH 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 Binance Coin with a short position of CHINA CONCH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and CHINA CONCH.

Diversification Opportunities for Binance Coin and CHINA CONCH

-0.23

Correlation Coefficient

Binance Coin  CHINA CONCH

Very good diversification

The 3 months correlation between Binance and CHINA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and CHINA CH VENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA CH VENT and Binance Coin 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 Binance Coin are associated (or correlated) with CHINA CONCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA CH VENT has no effect on the direction of Binance Coin i.e., Binance Coin and CHINA CONCH go up and down completely randomly.

Pair Corralation between Binance Coin and CHINA CONCH

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the CHINA CONCH. But the crypto coin apears to be less risky and, when comparing its historical volatility, Binance Coin is 1.39 times less risky than CHINA CONCH. The crypto coin trades about -0.02 of its potential returns per unit of risk. The CHINA CH VENT is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  83.00  in CHINA CH VENT on December 20, 2024 and sell it today you would earn a total of  7.00  from holding CHINA CH VENT or generate 8.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Binance Coin  vs.  CHINA CH VENT

Binance Coin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Binance Coin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Binance Coin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

CHINA CH VENT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA CH VENT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CHINA CONCH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and CHINA CONCH

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

The idea behind Binance Coin and CHINA CH VENT 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.