Correlation Between Ontology and Binance Coin
Can any of the company-specific risk be diversified away by investing in both Ontology and Binance Coin 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 Ontology and Binance Coin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontology and Binance Coin, you can compare the effects of market volatilities on Ontology and Binance Coin 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 Ontology with a short position of Binance Coin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontology and Binance Coin.
Diversification Opportunities for Ontology and Binance Coin
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ontology and Binance is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ontology and Binance Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binance Coin and Ontology 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 Ontology are associated (or correlated) with Binance Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binance Coin has no effect on the direction of Ontology i.e., Ontology and Binance Coin go up and down completely randomly.
Pair Corralation between Ontology and Binance Coin
Assuming the 90 days trading horizon Ontology is expected to generate 2.81 times more return on investment than Binance Coin. However, Ontology is 2.81 times more volatile than Binance Coin. It trades about 0.0 of its potential returns per unit of risk. Binance Coin is currently generating about -0.03 per unit of risk. If you would invest 32.00 in Ontology on January 19, 2024 and sell it today you would lose (3.00) from holding Ontology or give up 9.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontology vs. Binance Coin
Performance |
| Timeline |
| Ontology |
| Binance Coin |
Ontology and Binance Coin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontology and Binance Coin
The main advantage of trading using opposite Ontology and Binance Coin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontology position performs unexpectedly, Binance Coin 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 Binance Coin will offset losses from the drop in Binance Coin's long position.The idea behind Ontology and Binance Coin 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.| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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