Correlation Between Binance Coin and NFT Gaming

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

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

Diversification Opportunities for Binance Coin and NFT Gaming

0.0

Correlation Coefficient

Binance Coin  NFT Gaming

Pay attention - limited upside

The 3 months correlation between Binance and NFT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and The NFT Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFT Gaming 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 NFT Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFT Gaming has no effect on the direction of Binance Coin i.e., Binance Coin and NFT Gaming go up and down completely randomly.

Pair Corralation between Binance Coin and NFT Gaming

If you would invest (100.00) in The NFT Gaming on December 20, 2024 and sell it today you would earn a total of  100.00  from holding The NFT Gaming or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Binance Coin  vs.  The NFT Gaming

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.

NFT Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days The NFT Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NFT Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Binance Coin and NFT Gaming

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

The idea behind Binance Coin and The NFT Gaming 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.

Check out your portfolio center.

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.