Correlation Between Binance Coin and Quant
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Quant 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 Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Quant, you can compare the effects of market volatilities on Binance Coin and Quant 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 Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Quant.
Diversification Opportunities for Binance Coin and Quant
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binance and Quant is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant 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 Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quant has no effect on the direction of Binance Coin i.e., Binance Coin and Quant go up and down completely randomly.
Pair Corralation between Binance Coin and Quant
Assuming the 90 days trading horizon Binance Coin is expected to generate 0.79 times more return on investment than Quant. However, Binance Coin is 1.26 times less risky than Quant. It trades about 0.08 of its potential returns per unit of risk. Quant is currently generating about -0.2 per unit of risk. If you would invest 58,345 in Binance Coin on January 27, 2024 and sell it today you would earn a total of 2,925 from holding Binance Coin or generate 5.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Binance Coin vs. Quant
Performance |
Timeline |
Binance Coin |
Quant |
Binance Coin and Quant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Binance Coin and Quant
The main advantage of trading using opposite Binance Coin and Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Quant 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 Quant will offset losses from the drop in Quant's long position.Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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