Correlation Between Binance Coin and Trust Wallet
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Trust Wallet 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 Trust Wallet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Trust Wallet Token, you can compare the effects of market volatilities on Binance Coin and Trust Wallet 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 Trust Wallet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Trust Wallet.
Diversification Opportunities for Binance Coin and Trust Wallet
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binance and Trust is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Trust Wallet Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust Wallet Token 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 Trust Wallet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust Wallet Token has no effect on the direction of Binance Coin i.e., Binance Coin and Trust Wallet go up and down completely randomly.
Pair Corralation between Binance Coin and Trust Wallet
Assuming the 90 days trading horizon Binance Coin is expected to generate 1.58 times less return on investment than Trust Wallet. But when comparing it to its historical volatility, Binance Coin is 1.83 times less risky than Trust Wallet. It trades about 0.14 of its potential returns per unit of risk. Trust Wallet Token is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Trust Wallet Token on August 30, 2024 and sell it today you would earn a total of 28.00 from holding Trust Wallet Token or generate 32.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binance Coin vs. Trust Wallet Token
Performance |
| Timeline |
| Binance Coin |
| Trust Wallet Token |
Binance Coin and Trust Wallet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Trust Wallet
The main advantage of trading using opposite Binance Coin and Trust Wallet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Trust Wallet 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 Trust Wallet will offset losses from the drop in Trust Wallet's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. XMR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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