Correlation Between Binance Coin and JX Luxventure

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

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

Diversification Opportunities for Binance Coin and JX Luxventure

-0.3

Correlation Coefficient

Binance Coin  JX Luxventure

Very good diversification

The 3 months correlation between Binance and JXG is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and JX Luxventure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JX Luxventure Limited 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 JX Luxventure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JX Luxventure Limited has no effect on the direction of Binance Coin i.e., Binance Coin and JX Luxventure go up and down completely randomly.

Pair Corralation between Binance Coin and JX Luxventure

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the JX Luxventure. But the crypto coin apears to be less risky and, when comparing its historical volatility, Binance Coin is 9.23 times less risky than JX Luxventure. The crypto coin trades about -0.01 of its potential returns per unit of risk. The JX Luxventure Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  82.00  in JX Luxventure Limited on December 20, 2024 and sell it today you would earn a total of  173.00  from holding JX Luxventure Limited or generate 210.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Binance Coin  vs.  JX Luxventure Limited

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 rather sound fundamental drivers, Binance Coin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

JX Luxventure Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JX Luxventure Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, JX Luxventure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binance Coin and JX Luxventure

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

The idea behind Binance Coin and JX Luxventure Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.