Correlation Between Binance Coin and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Binance Coin and SPDR SP 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 SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and SPDR SP Global, you can compare the effects of market volatilities on Binance Coin and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and SPDR SP.
Diversification Opportunities for Binance Coin and SPDR SP
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binance and SPDR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and SPDR SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Global 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Global has no effect on the direction of Binance Coin i.e., Binance Coin and SPDR SP go up and down completely randomly.
Pair Corralation between Binance Coin and SPDR SP
Assuming the 90 days trading horizon Binance Coin is expected to generate 8.84 times more return on investment than SPDR SP. However, Binance Coin is 8.84 times more volatile than SPDR SP Global. It trades about 0.06 of its potential returns per unit of risk. SPDR SP Global is currently generating about 0.0 per unit of risk. If you would invest 29,623 in Binance Coin on November 2, 2024 and sell it today you would earn a total of 38,193 from holding Binance Coin or generate 128.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.32% |
| Values | Daily Returns |
Binance Coin vs. SPDR SP Global
Performance |
| Timeline |
| Binance Coin |
| SPDR SP Global |
Binance Coin and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and SPDR SP
The main advantage of trading using opposite Binance Coin and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| SPDR SP vs. FlexShares Morningstar Global | SPDR SP vs. SPDR SP North | SPDR SP vs. abrdn Physical Precious | SPDR SP vs. SPDR SP Global |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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