Correlation Between Binance Coin and IShares Core
Can any of the company-specific risk be diversified away by investing in both Binance Coin and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and iShares Core SP, you can compare the effects of market volatilities on Binance Coin and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and IShares Core.
Diversification Opportunities for Binance Coin and IShares Core
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Binance Coin i.e., Binance Coin and IShares Core go up and down completely randomly.
Pair Corralation between Binance Coin and IShares Core
Assuming the 90 days trading horizon Binance Coin is expected to generate 3.99 times more return on investment than IShares Core. However, Binance Coin is 3.99 times more volatile than iShares Core SP. It trades about 0.05 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.16 per unit of risk. If you would invest 60,233 in Binance Coin on October 21, 2024 and sell it today you would earn a total of 10,645 from holding Binance Coin or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 60.0% |
| Values | Daily Returns |
Binance Coin vs. iShares Core SP
Performance |
| Timeline |
| Binance Coin |
| iShares Core SP |
Binance Coin and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and IShares Core
The main advantage of trading using opposite Binance Coin and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| IShares Core vs. iShares Govt Bond | IShares Core vs. iShares Global AAA AA | IShares Core vs. iShares Smart City | IShares Core vs. iShares Broad High |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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