Correlation Between Binance Coin and Baron Health
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Baron Health 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 Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Baron Health Care, you can compare the effects of market volatilities on Binance Coin and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Baron Health.
Diversification Opportunities for Binance Coin and Baron Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binance and Baron is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Binance Coin i.e., Binance Coin and Baron Health go up and down completely randomly.
Pair Corralation between Binance Coin and Baron Health
Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Baron Health. In addition to that, Binance Coin is 1.93 times more volatile than Baron Health Care. It trades about -0.01 of its total potential returns per unit of risk. Baron Health Care is currently generating about 0.22 per unit of volatility. If you would invest 1,963 in Baron Health Care on October 26, 2024 and sell it today you would earn a total of 68.00 from holding Baron Health Care or generate 3.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 85.71% |
Values | Daily Returns |
Binance Coin vs. Baron Health Care
Performance |
Timeline |
Binance Coin |
Baron Health Care |
Binance Coin and Baron Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Binance Coin and Baron Health
The main advantage of trading using opposite Binance Coin and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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