Correlation Between Binance Coin and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Espey Mfg 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 Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Espey Mfg Electronics, you can compare the effects of market volatilities on Binance Coin and Espey Mfg 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 Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Espey Mfg.
Diversification Opportunities for Binance Coin and Espey Mfg
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binance and Espey is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Espey Mfg Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Espey Mfg 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 Espey Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Espey Mfg Electronics has no effect on the direction of Binance Coin i.e., Binance Coin and Espey Mfg go up and down completely randomly.
Pair Corralation between Binance Coin and Espey Mfg
Assuming the 90 days trading horizon Binance Coin is expected to generate 0.81 times more return on investment than Espey Mfg. However, Binance Coin is 1.24 times less risky than Espey Mfg. It trades about -0.12 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.16 per unit of risk. If you would invest 70,643 in Binance Coin on November 1, 2024 and sell it today you would lose (2,827) from holding Binance Coin or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Binance Coin vs. Espey Mfg Electronics
Performance |
| Timeline |
| Binance Coin |
| Espey Mfg Electronics |
Binance Coin and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Espey Mfg
The main advantage of trading using opposite Binance Coin and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Espey Mfg 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 Espey Mfg will offset losses from the drop in Espey Mfg's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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