Correlation Between Binance Coin and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Target Retirement 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 Target Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Target Retirement 2040, you can compare the effects of market volatilities on Binance Coin and Target Retirement 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Target Retirement.
Diversification Opportunities for Binance Coin and Target Retirement
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binance and Target is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 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 Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Binance Coin i.e., Binance Coin and Target Retirement go up and down completely randomly.
Pair Corralation between Binance Coin and Target Retirement
Assuming the 90 days trading horizon Binance Coin is expected to generate 4.54 times more return on investment than Target Retirement. However, Binance Coin is 4.54 times more volatile than Target Retirement 2040. It trades about 0.12 of its potential returns per unit of risk. Target Retirement 2040 is currently generating about -0.03 per unit of risk. If you would invest 61,662 in Binance Coin on October 19, 2024 and sell it today you would earn a total of 10,407 from holding Binance Coin or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.18% |
| Values | Daily Returns |
Binance Coin vs. Target Retirement 2040
Performance |
| Timeline |
| Binance Coin |
| Target Retirement 2040 |
Binance Coin and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Target Retirement
The main advantage of trading using opposite Binance Coin and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Target Retirement 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 Target Retirement will offset losses from the drop in Target Retirement's 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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