Correlation Between Binance Coin and Starr Peak

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

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

Diversification Opportunities for Binance Coin and Starr Peak

-0.29

Correlation Coefficient

Binance Coin  Starr Peak

Very good diversification

The 3 months correlation between Binance and Starr is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Starr Peak Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starr Peak Exploration 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 Starr Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starr Peak Exploration has no effect on the direction of Binance Coin i.e., Binance Coin and Starr Peak go up and down completely randomly.

Pair Corralation between Binance Coin and Starr Peak

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Starr Peak. In addition to that, Binance Coin is 1.03 times more volatile than Starr Peak Exploration. It trades about -0.02 of its total potential returns per unit of risk. Starr Peak Exploration is currently generating about 0.04 per unit of volatility. If you would invest  36.00  in Starr Peak Exploration on December 20, 2024 and sell it today you would earn a total of  2.00  from holding Starr Peak Exploration or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Binance Coin  vs.  Starr Peak Exploration

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.

Starr Peak Exploration

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Starr Peak Exploration are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Starr Peak may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Binance Coin and Starr Peak

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

The idea behind Binance Coin and Starr Peak Exploration 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.