Correlation Between Binance Coin and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Duke 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 Duke 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 Duke Energy, you can compare the effects of market volatilities on Binance Coin and Duke 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 Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Duke Energy.
Diversification Opportunities for Binance Coin and Duke Energy
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binance and Duke is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke 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 Duke Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duke Energy has no effect on the direction of Binance Coin i.e., Binance Coin and Duke Energy go up and down completely randomly.
Pair Corralation between Binance Coin and Duke Energy
Assuming the 90 days trading horizon Binance Coin is expected to generate 2.14 times more return on investment than Duke Energy. However, Binance Coin is 2.14 times more volatile than Duke Energy. It trades about 0.15 of its potential returns per unit of risk. Duke Energy is currently generating about 0.11 per unit of risk. If you would invest 67,832 in Binance Coin on October 20, 2024 and sell it today you would earn a total of 4,237 from holding Binance Coin or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Binance Coin vs. Duke Energy
Performance |
| Timeline |
| Binance Coin |
| Duke Energy |
Binance Coin and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Duke Energy
The main advantage of trading using opposite Binance Coin and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Duke 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 Duke Energy will offset losses from the drop in Duke Energy's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Duke Energy vs. Consolidated Edison | Duke Energy vs. Dominion Energy | Duke Energy vs. American Electric Power | Duke Energy vs. Nextera Energy |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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