Correlation Between Binance Coin and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Safestore Holdings 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 Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Safestore Holdings plc, you can compare the effects of market volatilities on Binance Coin and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Safestore Holdings.
Diversification Opportunities for Binance Coin and Safestore Holdings
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Binance and Safestore is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Binance Coin i.e., Binance Coin and Safestore Holdings go up and down completely randomly.
Pair Corralation between Binance Coin and Safestore Holdings
Assuming the 90 days trading horizon Binance Coin is expected to generate 1.83 times more return on investment than Safestore Holdings. However, Binance Coin is 1.83 times more volatile than Safestore Holdings plc. It trades about 0.04 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.05 per unit of risk. If you would invest 60,233 in Binance Coin on October 16, 2024 and sell it today you would earn a total of 8,697 from holding Binance Coin or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 63.3% |
| Values | Daily Returns |
Binance Coin vs. Safestore Holdings plc
Performance |
| Timeline |
| Binance Coin |
| Safestore Holdings plc |
Binance Coin and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Safestore Holdings
The main advantage of trading using opposite Binance Coin and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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