Correlation Between Binance Coin and Evexx

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

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

Diversification Opportunities for Binance Coin and Evexx

-0.32

Correlation Coefficient

Binance Coin  Evexx

Very good diversification

The 3 months correlation between Binance and Evexx is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Evexx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evexx 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 Evexx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evexx has no effect on the direction of Binance Coin i.e., Binance Coin and Evexx go up and down completely randomly.

Pair Corralation between Binance Coin and Evexx

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Evexx. But the crypto coin apears to be less risky and, when comparing its historical volatility, Binance Coin is 60.22 times less risky than Evexx. The crypto coin trades about -0.02 of its potential returns per unit of risk. The Evexx is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  434.00  in Evexx on October 25, 2024 and sell it today you would lose (334.00) from holding Evexx or give up 76.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Binance Coin  vs.  Evexx

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.

Evexx

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evexx are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Evexx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and Evexx

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

The idea behind Binance Coin and Evexx 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.