Correlation Between Binance Coin and Workday

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

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

Diversification Opportunities for Binance Coin and Workday

0.1

Correlation Coefficient

Binance Coin  Workday

Average diversification

The 3 months correlation between Binance and Workday is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday 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 Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of Binance Coin i.e., Binance Coin and Workday go up and down completely randomly.

Pair Corralation between Binance Coin and Workday

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Workday. In addition to that, Binance Coin is 1.38 times more volatile than Workday. It trades about -0.04 of its total potential returns per unit of risk. Workday is currently generating about -0.06 per unit of volatility. If you would invest  25,345  in Workday on December 21, 2024 and sell it today you would lose (2,355) from holding Workday or give up 9.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Binance Coin  vs.  Workday

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.

Workday

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workday has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Binance Coin and Workday

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

The idea behind Binance Coin and Workday 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.