Correlation Between Binance Coin and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Rheinmetall 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 Rheinmetall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Rheinmetall AG, you can compare the effects of market volatilities on Binance Coin and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Rheinmetall.
Diversification Opportunities for Binance Coin and Rheinmetall
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and Rheinmetall is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of Binance Coin i.e., Binance Coin and Rheinmetall go up and down completely randomly.
Pair Corralation between Binance Coin and Rheinmetall
Assuming the 90 days trading horizon Binance Coin is expected to generate about the same return on investment as Rheinmetall AG. However, Binance Coin is 1.25 times more volatile than Rheinmetall AG. It trades about 0.06 of its potential returns per unit of risk. Rheinmetall AG is currently producing about 0.08 per unit of risk. If you would invest 63,002 in Rheinmetall AG on October 10, 2024 and sell it today you would earn a total of 1,718 from holding Rheinmetall AG or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Binance Coin vs. Rheinmetall AG
Performance |
| Timeline |
| Binance Coin |
| Rheinmetall AG |
Binance Coin and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Rheinmetall
The main advantage of trading using opposite Binance Coin and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Rheinmetall vs. Walmart | Rheinmetall vs. BYD Co | Rheinmetall vs. Volkswagen AG | Rheinmetall vs. Volkswagen AG Non Vtg |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |