Correlation Between Binance Coin and Gold Bond
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Gold Bond 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 Gold Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and The Gold Bond, you can compare the effects of market volatilities on Binance Coin and Gold Bond 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 Gold Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Gold Bond.
Diversification Opportunities for Binance Coin and Gold Bond
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binance and Gold is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and The Gold Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bond 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 Gold Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bond has no effect on the direction of Binance Coin i.e., Binance Coin and Gold Bond go up and down completely randomly.
Pair Corralation between Binance Coin and Gold Bond
Assuming the 90 days trading horizon Binance Coin is expected to generate 5.54 times less return on investment than Gold Bond. But when comparing it to its historical volatility, Binance Coin is 1.09 times less risky than Gold Bond. It trades about 0.06 of its potential returns per unit of risk. The Gold Bond is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,750,000 in The Gold Bond on October 22, 2024 and sell it today you would earn a total of 159,000 from holding The Gold Bond or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Binance Coin vs. The Gold Bond
Performance |
| Timeline |
| Binance Coin |
| Gold Bond |
Binance Coin and Gold Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Gold Bond
The main advantage of trading using opposite Binance Coin and Gold Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Gold Bond 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 Gold Bond will offset losses from the drop in Gold Bond'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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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