Correlation Between Binance Coin and First National

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

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

Diversification Opportunities for Binance Coin and First National

-0.12

Correlation Coefficient

Binance Coin  First National

Good diversification

The 3 months correlation between Binance and First is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and First National of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National has no effect on the direction of Binance Coin i.e., Binance Coin and First National go up and down completely randomly.

Pair Corralation between Binance Coin and First National

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the First National. In addition to that, Binance Coin is 2.67 times more volatile than First National of. It trades about -0.04 of its total potential returns per unit of risk. First National of is currently generating about 0.03 per unit of volatility. If you would invest  1,186,000  in First National of on December 21, 2024 and sell it today you would earn a total of  14,000  from holding First National of or generate 1.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.6%
Values	Daily Returns

Binance Coin  vs.  First National of

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.

First National

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First National of are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, First National is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Binance Coin and First National

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

The idea behind Binance Coin and First National of 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.