Correlation Between Binance Coin and JAIZ BANK

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

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

Diversification Opportunities for Binance Coin and JAIZ BANK

0.5

Correlation Coefficient

Binance Coin  JAIZ BANK

Very weak diversification

The 3 months correlation between Binance and JAIZ is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and JAIZ BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAIZ BANK PLC 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 JAIZ BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAIZ BANK PLC has no effect on the direction of Binance Coin i.e., Binance Coin and JAIZ BANK go up and down completely randomly.

Pair Corralation between Binance Coin and JAIZ BANK

Assuming the 90 days trading horizon Binance Coin is expected to generate 1.18 times less return on investment than JAIZ BANK. In addition to that, Binance Coin is 1.01 times more volatile than JAIZ BANK PLC. It trades about 0.11 of its total potential returns per unit of risk. JAIZ BANK PLC is currently generating about 0.13 per unit of volatility. If you would invest  241.00  in JAIZ BANK PLC on October 24, 2024 and sell it today you would earn a total of  59.00  from holding JAIZ BANK PLC or generate 24.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Binance Coin  vs.  JAIZ BANK PLC

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.

JAIZ BANK PLC

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JAIZ BANK PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, JAIZ BANK displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and JAIZ BANK

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

The idea behind Binance Coin and JAIZ BANK PLC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.