Correlation Between Binance Coin and YOU
Can any of the company-specific risk be diversified away by investing in both Binance Coin and YOU 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 YOU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and YOU, you can compare the effects of market volatilities on Binance Coin and YOU 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 YOU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and YOU.
Diversification Opportunities for Binance Coin and YOU
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Binance and YOU is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and YOU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YOU 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 YOU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YOU has no effect on the direction of Binance Coin i.e., Binance Coin and YOU go up and down completely randomly.
Pair Corralation between Binance Coin and YOU
Assuming the 90 days trading horizon Binance Coin is expected to under-perform the YOU. But the crypto coin apears to be less risky and, when comparing its historical volatility, Binance Coin is 1.62 times less risky than YOU. The crypto coin trades about -0.03 of its potential returns per unit of risk. The YOU is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.02 in YOU on January 19, 2024 and sell it today you would earn a total of 0.00 from holding YOU or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binance Coin vs. YOU
Performance |
| Timeline |
| Binance Coin |
| YOU |
Binance Coin and YOU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and YOU
The main advantage of trading using opposite Binance Coin and YOU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, YOU 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 YOU will offset losses from the drop in YOU'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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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