Correlation Between Binance Coin and Hua Hong
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Hua Hong 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 Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Hua Hong Semiconductor, you can compare the effects of market volatilities on Binance Coin and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Hua Hong.
Diversification Opportunities for Binance Coin and Hua Hong
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binance and Hua is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of Binance Coin i.e., Binance Coin and Hua Hong go up and down completely randomly.
Pair Corralation between Binance Coin and Hua Hong
Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Hua Hong. But the crypto coin apears to be less risky and, when comparing its historical volatility, Binance Coin is 2.05 times less risky than Hua Hong. The crypto coin trades about -0.02 of its potential returns per unit of risk. The Hua Hong Semiconductor is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Hua Hong Semiconductor on October 25, 2024 and sell it today you would earn a total of 24.00 from holding Hua Hong Semiconductor or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Binance Coin vs. Hua Hong Semiconductor
Performance |
| Timeline |
| Binance Coin |
| Hua Hong Semiconductor |
Binance Coin and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Hua Hong
The main advantage of trading using opposite Binance Coin and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Hua Hong vs. Discover Financial Services | Hua Hong vs. COPLAND ROAD CAPITAL | Hua Hong vs. BANK OF CHINA | Hua Hong vs. Chiba Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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