Correlation Between Binance Coin and Arga Value

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

By analyzing existing cross correlation between Binance Coin and Arga Value Institutional, you can compare the effects of market volatilities on Binance Coin and Arga Value 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 Arga Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Arga Value.

Diversification Opportunities for Binance Coin and Arga Value

0.2

Correlation Coefficient

Binance Coin  Arga Value

Modest diversification

The 3 months correlation between Binance and Arga is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Arga Value Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arga Value Institutional 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 Arga Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arga Value Institutional has no effect on the direction of Binance Coin i.e., Binance Coin and Arga Value go up and down completely randomly.

Pair Corralation between Binance Coin and Arga Value

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Arga Value. In addition to that, Binance Coin is 3.68 times more volatile than Arga Value Institutional. It trades about -0.04 of its total potential returns per unit of risk. Arga Value Institutional is currently generating about 0.02 per unit of volatility. If you would invest  1,067  in Arga Value Institutional on December 21, 2024 and sell it today you would earn a total of  8.00  from holding Arga Value Institutional or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Binance Coin  vs.  Arga Value Institutional

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 latest unsteady performance, the Crypto's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Binance Coin shareholders.

Arga Value Institutional

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arga Value Institutional are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Arga Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Binance Coin and Arga Value

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

The idea behind Binance Coin and Arga Value Institutional 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.