Correlation Between WhiteBIT Token and Banana Gun

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

By analyzing existing cross correlation between WhiteBIT Token and Banana Gun, you can compare the effects of market volatilities on WhiteBIT Token and Banana Gun 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 WhiteBIT Token with a short position of Banana Gun. Check out your portfolio center. Please also check ongoing floating volatility patterns of WhiteBIT Token and Banana Gun.

Diversification Opportunities for WhiteBIT Token and Banana Gun

0.9

Correlation Coefficient

WhiteBIT Token  Banana Gun

Almost no diversification

The 3 months correlation between WhiteBIT and Banana is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding WhiteBIT Token and Banana Gun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banana Gun and WhiteBIT Token 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 WhiteBIT Token are associated (or correlated) with Banana Gun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banana Gun has no effect on the direction of WhiteBIT Token i.e., WhiteBIT Token and Banana Gun go up and down completely randomly.

Pair Corralation between WhiteBIT Token and Banana Gun

Assuming the 90 days trading horizon WhiteBIT Token is expected to generate 0.67 times more return on investment than Banana Gun. However, WhiteBIT Token is 1.48 times less risky than Banana Gun. It trades about 0.3 of its potential returns per unit of risk. Banana Gun is currently generating about 0.18 per unit of risk. If you would invest  1,081  in WhiteBIT Token on September 2, 2024 and sell it today you would earn a total of  1,267  from holding WhiteBIT Token or generate 117.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

WhiteBIT Token  vs.  Banana Gun

WhiteBIT Token

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WhiteBIT Token are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, WhiteBIT Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

Banana Gun

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banana Gun are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Banana Gun sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WhiteBIT Token and Banana Gun

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

The idea behind WhiteBIT Token and Banana Gun 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.