Correlation Between Binance Coin and Gatechain Token
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
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and Gatechain is 0.88. 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 0.67 times more return on investment than Gatechain Token. However, Binance Coin is 1.49 times less risky than Gatechain Token. It trades about 0.07 of its potential returns per unit of risk. Gatechain Token is currently generating about -0.1 per unit of risk. If you would invest 58,029 in Binance Coin on January 25, 2024 and sell it today you would earn a total of 2,591 from holding Binance Coin or generate 4.47% 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. Gatechain Token
Performance |
| Timeline |
| Binance Coin |
| Gatechain Token |
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.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Gatechain Token vs. Solana | Gatechain Token vs. XRP | Gatechain Token vs. Staked Ether | Gatechain Token vs. The Open Network |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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