Correlation Between Binance Coin and Gatechain Token

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Can any of the company-specific risk be diversified away by investing in both Binance Coin and Gatechain Token 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 Gatechain Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Gatechain Token, you can compare the effects of market volatilities on Binance Coin and Gatechain Token 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 Gatechain Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Gatechain Token.

Diversification Opportunities for Binance Coin and Gatechain Token

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Binance and Gatechain is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Gatechain Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatechain 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 Gatechain Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatechain Token has no effect on the direction of Binance Coin i.e., Binance Coin and Gatechain Token go up and down completely randomly.

Pair Corralation between Binance Coin and Gatechain Token

Assuming the 90 days trading horizon Binance Coin is expected to generate 1.01 times less return on investment than Gatechain Token. In addition to that, Binance Coin is 1.15 times more volatile than Gatechain Token. It trades about 0.04 of its total potential returns per unit of risk. Gatechain Token is currently generating about 0.04 per unit of volatility. If you would invest  638.00  in Gatechain Token on December 30, 2023 and sell it today you would earn a total of  361.00  from holding Gatechain Token or generate 56.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Binance Coin  vs.  Gatechain Token

 Performance 
       Timeline  
Binance Coin 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Binance Coin are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Binance Coin exhibited solid returns over the last few months and may actually be approaching a breakup point.
Gatechain Token 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Gatechain Token are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Gatechain Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

Binance Coin and Gatechain Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Binance Coin and Gatechain Token

The main advantage of trading using opposite Binance Coin and Gatechain Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Gatechain Token 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 Gatechain Token will offset losses from the drop in Gatechain Token's long position.
The idea behind Binance Coin and Gatechain Token pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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