Correlation Between Binance Coin and Herantis Pharma

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

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

Diversification Opportunities for Binance Coin and Herantis Pharma

0.13

Correlation Coefficient

Binance Coin  Herantis Pharma

Average diversification

The 3 months correlation between Binance and Herantis is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Herantis Pharma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herantis Pharma Oyj 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 Herantis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herantis Pharma Oyj has no effect on the direction of Binance Coin i.e., Binance Coin and Herantis Pharma go up and down completely randomly.

Pair Corralation between Binance Coin and Herantis Pharma

Assuming the 90 days trading horizon Binance Coin is expected to generate 1.82 times less return on investment than Herantis Pharma. But when comparing it to its historical volatility, Binance Coin is 1.34 times less risky than Herantis Pharma. It trades about 0.06 of its potential returns per unit of risk. Herantis Pharma Oyj is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Herantis Pharma Oyj on October 10, 2024 and sell it today you would earn a total of  6.00  from holding Herantis Pharma Oyj or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	77.27%
Values	Daily Returns

Binance Coin  vs.  Herantis Pharma Oyj

Binance Coin

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binance Coin are ranked lower than 9 (%) 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.

Herantis Pharma Oyj

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Herantis Pharma Oyj are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Herantis Pharma demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and Herantis Pharma

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

The idea behind Binance Coin and Herantis Pharma Oyj 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.