Correlation Between Binance Coin and Clearbridge International

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

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

Diversification Opportunities for Binance Coin and Clearbridge International

-0.67

Correlation Coefficient

Binance Coin  Clearbridge International

Excellent diversification

The 3 months correlation between Binance and Clearbridge is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Clearbridge International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Binance Coin i.e., Binance Coin and Clearbridge International go up and down completely randomly.

Pair Corralation between Binance Coin and Clearbridge International

Assuming the 90 days trading horizon Binance Coin is expected to generate 10.93 times more return on investment than Clearbridge International. However, Binance Coin is 10.93 times more volatile than Clearbridge International Value. It trades about 0.06 of its potential returns per unit of risk. Clearbridge International Value is currently generating about 0.02 per unit of risk. If you would invest  30,502  in Binance Coin on October 10, 2024 and sell it today you would earn a total of  39,898  from holding Binance Coin or generate 130.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	60.0%
Values	Daily Returns

Binance Coin  vs.  Clearbridge International Valu

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.

Clearbridge International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearbridge International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Binance Coin and Clearbridge International

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

The idea behind Binance Coin and Clearbridge International Value 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.