Correlation Between Binance Coin and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Benchmark Electronics 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 Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Benchmark Electronics, you can compare the effects of market volatilities on Binance Coin and Benchmark Electronics 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Benchmark Electronics.
Diversification Opportunities for Binance Coin and Benchmark Electronics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binance and Benchmark is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of Binance Coin i.e., Binance Coin and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Binance Coin and Benchmark Electronics
Assuming the 90 days trading horizon Binance Coin is expected to generate 2.05 times more return on investment than Benchmark Electronics. However, Binance Coin is 2.05 times more volatile than Benchmark Electronics. It trades about 0.12 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.05 per unit of risk. If you would invest 61,662 in Binance Coin on October 19, 2024 and sell it today you would earn a total of 10,407 from holding Binance Coin or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Binance Coin vs. Benchmark Electronics
Performance |
| Timeline |
| Binance Coin |
| Benchmark Electronics |
Binance Coin and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Benchmark Electronics
The main advantage of trading using opposite Binance Coin and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Benchmark Electronics vs. Marie Brizard Wine | Benchmark Electronics vs. Virtus Investment Partners | Benchmark Electronics vs. TRAINLINE PLC LS | Benchmark Electronics vs. MidCap Financial Investment |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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