Correlation Between Binance Coin and InflaRx NV

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

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

Diversification Opportunities for Binance Coin and InflaRx NV

0.9

Correlation Coefficient

Binance Coin  InflaRx NV

Almost no diversification

The 3 months correlation between Binance and InflaRx is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and InflaRx NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InflaRx NV 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 InflaRx NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InflaRx NV has no effect on the direction of Binance Coin i.e., Binance Coin and InflaRx NV go up and down completely randomly.

Pair Corralation between Binance Coin and InflaRx NV

Assuming the 90 days trading horizon Binance Coin is expected to generate 0.34 times more return on investment than InflaRx NV. However, Binance Coin is 2.96 times less risky than InflaRx NV. It trades about -0.01 of its potential returns per unit of risk. InflaRx NV is currently generating about -0.08 per unit of risk. If you would invest  68,861  in Binance Coin on October 26, 2024 and sell it today you would lose (321.00) from holding Binance Coin or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	85.71%
Values	Daily Returns

Binance Coin  vs.  InflaRx NV

Binance Coin

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Binance Coin are ranked lower than 6 (%) 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.

InflaRx NV

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InflaRx NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, InflaRx NV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and InflaRx NV

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

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