Correlation Between Binance Coin and Launch One

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

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

Diversification Opportunities for Binance Coin and Launch One

-0.53

Correlation Coefficient

Binance Coin  Launch One

Excellent diversification

The 3 months correlation between Binance and Launch is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Launch One Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch One Acquisition 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 Launch One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch One Acquisition has no effect on the direction of Binance Coin i.e., Binance Coin and Launch One go up and down completely randomly.

Pair Corralation between Binance Coin and Launch One

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Launch One. In addition to that, Binance Coin is 9.3 times more volatile than Launch One Acquisition. It trades about -0.04 of its total potential returns per unit of risk. Launch One Acquisition is currently generating about 0.06 per unit of volatility. If you would invest  1,010  in Launch One Acquisition on December 21, 2024 and sell it today you would earn a total of  13.00  from holding Launch One Acquisition or generate 1.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Binance Coin  vs.  Launch One Acquisition

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.

Launch One Acquisition

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Launch One Acquisition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Launch One is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Binance Coin and Launch One

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

The idea behind Binance Coin and Launch One Acquisition 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.