Correlation Between Binance Coin and VanEck Global
Can any of the company-specific risk be diversified away by investing in both Binance Coin and VanEck Global 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 VanEck Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and VanEck Global Listed, you can compare the effects of market volatilities on Binance Coin and VanEck Global 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 VanEck Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and VanEck Global.
Diversification Opportunities for Binance Coin and VanEck Global
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and VanEck is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed 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 VanEck Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of Binance Coin i.e., Binance Coin and VanEck Global go up and down completely randomly.
Pair Corralation between Binance Coin and VanEck Global
Assuming the 90 days trading horizon Binance Coin is expected to generate 1.99 times more return on investment than VanEck Global. However, Binance Coin is 1.99 times more volatile than VanEck Global Listed. It trades about 0.15 of its potential returns per unit of risk. VanEck Global Listed is currently generating about 0.22 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 Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Binance Coin vs. VanEck Global Listed
Performance |
| Timeline |
| Binance Coin |
| VanEck Global Listed |
Binance Coin and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and VanEck Global
The main advantage of trading using opposite Binance Coin and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, VanEck Global 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 VanEck Global will offset losses from the drop in VanEck Global's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| VanEck Global vs. VanEck Vectors Australian | VanEck Global vs. VanEck FTSE China | VanEck Global vs. VanEck MSCI International | VanEck Global vs. VanEck Global Clean |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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