Correlation Between Binance Coin and Fidelity Advisor

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

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

Diversification Opportunities for Binance Coin and Fidelity Advisor

0.66

Correlation Coefficient

Binance Coin  Fidelity Advisor

Poor diversification

The 3 months correlation between Binance and Fidelity is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Fidelity Advisor Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor has no effect on the direction of Binance Coin i.e., Binance Coin and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Binance Coin and Fidelity Advisor

Assuming the 90 days trading horizon Binance Coin is expected to generate 20.73 times more return on investment than Fidelity Advisor. However, Binance Coin is 20.73 times more volatile than Fidelity Advisor Limited. It trades about 0.11 of its potential returns per unit of risk. Fidelity Advisor Limited is currently generating about 0.1 per unit of risk. If you would invest  57,423  in Binance Coin on October 24, 2024 and sell it today you would earn a total of  11,817  from holding Binance Coin or generate 20.58% return on investment over 90 days.

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

Binance Coin  vs.  Fidelity Advisor Limited

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.

Fidelity Advisor

Risk-Adjusted Performance

7 of 100

OK

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

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

The idea behind Binance Coin and Fidelity Advisor Limited 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.