Correlation Between Binance Coin and Northern Star

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

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

Diversification Opportunities for Binance Coin and Northern Star

0.0

Correlation Coefficient

Binance Coin  Northern Star

Pay attention - limited upside

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

Pair Corralation between Binance Coin and Northern Star

If you would invest (100.00) in Northern Star Investment on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Northern Star Investment 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.  Northern Star Investment

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.

Northern Star Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northern Star Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Northern Star is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Binance Coin and Northern Star

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

The idea behind Binance Coin and Northern Star Investment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.