Correlation Between Binance Coin and UL Solutions
Can any of the company-specific risk be diversified away by investing in both Binance Coin and UL Solutions 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 UL Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and UL Solutions, you can compare the effects of market volatilities on Binance Coin and UL Solutions 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 UL Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and UL Solutions.
Diversification Opportunities for Binance Coin and UL Solutions
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binance and ULS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and UL Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UL Solutions 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 UL Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UL Solutions has no effect on the direction of Binance Coin i.e., Binance Coin and UL Solutions go up and down completely randomly.
Pair Corralation between Binance Coin and UL Solutions
Assuming the 90 days trading horizon Binance Coin is expected to under-perform the UL Solutions. In addition to that, Binance Coin is 1.17 times more volatile than UL Solutions. It trades about -0.16 of its total potential returns per unit of risk. UL Solutions is currently generating about 0.42 per unit of volatility. If you would invest 4,965 in UL Solutions on November 2, 2024 and sell it today you would earn a total of 528.00 from holding UL Solutions or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Binance Coin vs. UL Solutions
Performance |
| Timeline |
| Binance Coin |
| UL Solutions |
Binance Coin and UL Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and UL Solutions
The main advantage of trading using opposite Binance Coin and UL Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, UL Solutions 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 UL Solutions will offset losses from the drop in UL Solutions' long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| UL Solutions vs. Yuexiu Transport Infrastructure | UL Solutions vs. Western Copper and | UL Solutions vs. NRG Energy | UL Solutions vs. Hafnia Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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