Correlation Between Binance Coin and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Binance Coin and FuelCell Energy 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 FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and FuelCell Energy, you can compare the effects of market volatilities on Binance Coin and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and FuelCell Energy.
Diversification Opportunities for Binance Coin and FuelCell Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binance and FuelCell is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Binance Coin i.e., Binance Coin and FuelCell Energy go up and down completely randomly.
Pair Corralation between Binance Coin and FuelCell Energy
Assuming the 90 days trading horizon Binance Coin is expected to generate 1.78 times less return on investment than FuelCell Energy. But when comparing it to its historical volatility, Binance Coin is 3.8 times less risky than FuelCell Energy. It trades about 0.15 of its potential returns per unit of risk. FuelCell Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 924.00 in FuelCell Energy on October 20, 2024 and sell it today you would earn a total of 50.00 from holding FuelCell Energy or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Binance Coin vs. FuelCell Energy
Performance |
| Timeline |
| Binance Coin |
| FuelCell Energy |
Binance Coin and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and FuelCell Energy
The main advantage of trading using opposite Binance Coin and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| FuelCell Energy vs. JB Hunt Transport | FuelCell Energy vs. Vitec Software Group | FuelCell Energy vs. Zoom Video Communications | FuelCell Energy vs. Spirent Communications plc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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