Correlation Between Binance Coin and Goldman Sachs

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

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

Diversification Opportunities for Binance Coin and Goldman Sachs

-0.52

Correlation Coefficient

Binance Coin  Goldman Sachs

Excellent diversification

The 3 months correlation between Binance and Goldman is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Goldman Sachs MarketBeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs MarketBeta 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs MarketBeta has no effect on the direction of Binance Coin i.e., Binance Coin and Goldman Sachs go up and down completely randomly.

Pair Corralation between Binance Coin and Goldman Sachs

Assuming the 90 days trading horizon Binance Coin is expected to generate 3.46 times more return on investment than Goldman Sachs. However, Binance Coin is 3.46 times more volatile than Goldman Sachs MarketBeta. It trades about -0.04 of its potential returns per unit of risk. Goldman Sachs MarketBeta is currently generating about -0.25 per unit of risk. If you would invest  70,610  in Binance Coin on October 12, 2024 and sell it today you would lose (1,840) from holding Binance Coin or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Binance Coin  vs.  Goldman Sachs MarketBeta

Binance Coin

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binance Coin are ranked lower than 7 (%) 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.

Goldman Sachs MarketBeta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs MarketBeta has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Binance Coin and Goldman Sachs

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

The idea behind Binance Coin and Goldman Sachs MarketBeta 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.