Correlation Between Binance Coin and Endeavour Silver

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

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

Diversification Opportunities for Binance Coin and Endeavour Silver

-0.77

Correlation Coefficient

Binance Coin  Endeavour Silver

Pay attention - limited upside

The 3 months correlation between Binance and Endeavour is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Endeavour Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Silver Corp 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 Endeavour Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Silver Corp has no effect on the direction of Binance Coin i.e., Binance Coin and Endeavour Silver go up and down completely randomly.

Pair Corralation between Binance Coin and Endeavour Silver

Assuming the 90 days trading horizon Binance Coin is expected to generate 2.26 times more return on investment than Endeavour Silver. However, Binance Coin is 2.26 times more volatile than Endeavour Silver Corp. It trades about 0.05 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about 0.02 per unit of risk. If you would invest  33,224  in Binance Coin on October 24, 2024 and sell it today you would earn a total of  36,016  from holding Binance Coin or generate 108.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	59.28%
Values	Daily Returns

Binance Coin  vs.  Endeavour Silver Corp

Binance Coin

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binance Coin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Binance Coin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Binance Coin and Endeavour Silver

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

The idea behind Binance Coin and Endeavour Silver Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.