Correlation Between Binance Coin and PT Indo

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

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

Diversification Opportunities for Binance Coin and PT Indo

0.2

Correlation Coefficient

Binance Coin  PT Indo

Modest diversification

The 3 months correlation between Binance and IBOS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and PT Indo Boga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indo Boga 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 PT Indo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indo Boga has no effect on the direction of Binance Coin i.e., Binance Coin and PT Indo go up and down completely randomly.

Pair Corralation between Binance Coin and PT Indo

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the PT Indo. But the crypto coin apears to be less risky and, when comparing its historical volatility, Binance Coin is 1.69 times less risky than PT Indo. The crypto coin trades about -0.03 of its potential returns per unit of risk. The PT Indo Boga is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,700  in PT Indo Boga on December 21, 2024 and sell it today you would earn a total of  500.00  from holding PT Indo Boga or generate 18.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.06%
Values	Daily Returns

Binance Coin  vs.  PT Indo Boga

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.

PT Indo Boga

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indo Boga are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Indo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and PT Indo

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

The idea behind Binance Coin and PT Indo Boga 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.