Correlation Between Binance Coin and Chiliz
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Chiliz 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 Chiliz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Chiliz, you can compare the effects of market volatilities on Binance Coin and Chiliz 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 Chiliz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Chiliz.
Diversification Opportunities for Binance Coin and Chiliz
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and Chiliz is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Chiliz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiliz 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 Chiliz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiliz has no effect on the direction of Binance Coin i.e., Binance Coin and Chiliz go up and down completely randomly.
Pair Corralation between Binance Coin and Chiliz
Assuming the 90 days trading horizon Binance Coin is expected to generate 0.57 times more return on investment than Chiliz. However, Binance Coin is 1.75 times less risky than Chiliz. It trades about 0.03 of its potential returns per unit of risk. Chiliz is currently generating about 0.01 per unit of risk. If you would invest 42,693 in Binance Coin on December 29, 2023 and sell it today you would earn a total of 15,507 from holding Binance Coin or generate 36.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Binance Coin vs. Chiliz
Performance |
Timeline |
Binance Coin |
Chiliz |
Binance Coin and Chiliz Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Binance Coin and Chiliz
The main advantage of trading using opposite Binance Coin and Chiliz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Chiliz 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 Chiliz will offset losses from the drop in Chiliz'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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