Correlation Between Binance Coin and Value Fund

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

By analyzing existing cross correlation between Binance Coin and Value Fund R5, you can compare the effects of market volatilities on Binance Coin and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Value Fund.

Diversification Opportunities for Binance Coin and Value Fund

-0.24

Correlation Coefficient

Binance Coin  Value Fund

Very good diversification

The 3 months correlation between Binance and Value is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Value Fund R5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund R5 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 Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund R5 has no effect on the direction of Binance Coin i.e., Binance Coin and Value Fund go up and down completely randomly.

Pair Corralation between Binance Coin and Value Fund

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Value Fund. In addition to that, Binance Coin is 4.41 times more volatile than Value Fund R5. It trades about -0.04 of its total potential returns per unit of risk. Value Fund R5 is currently generating about 0.1 per unit of volatility. If you would invest  772.00  in Value Fund R5 on December 21, 2024 and sell it today you would earn a total of  32.00  from holding Value Fund R5 or generate 4.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Binance Coin  vs.  Value Fund R5

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.

Value Fund R5

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Value Fund R5 are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Value Fund 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 Value Fund

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

The idea behind Binance Coin and Value Fund R5 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.