Correlation Between Binance Coin and Global Diversified

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

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

Diversification Opportunities for Binance Coin and Global Diversified

-0.81

Correlation Coefficient

Binance Coin  Global Diversified

Pay attention - limited upside

The 3 months correlation between Binance and Global is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Global Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Diversified Income 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 Global Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Diversified Income has no effect on the direction of Binance Coin i.e., Binance Coin and Global Diversified go up and down completely randomly.

Pair Corralation between Binance Coin and Global Diversified

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Global Diversified. In addition to that, Binance Coin is 19.05 times more volatile than Global Diversified Income. It trades about -0.03 of its total potential returns per unit of risk. Global Diversified Income is currently generating about 0.21 per unit of volatility. If you would invest  1,163  in Global Diversified Income on December 22, 2024 and sell it today you would earn a total of  24.00  from holding Global Diversified Income or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

Binance Coin  vs.  Global Diversified Income

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.

Global Diversified Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Diversified Income are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Global Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Binance Coin and Global Diversified

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

The idea behind Binance Coin and Global Diversified Income 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.