Correlation Between Binance Coin and MSCI

Can any of the company-specific risk be diversified away by investing in both Binance Coin and MSCI 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 MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Binance Coin and MSCI Inc, you can compare the effects of market volatilities on Binance Coin and MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and MSCI.

Diversification Opportunities for Binance Coin and MSCI

-0.63

Correlation Coefficient

Binance Coin  MSCI

Excellent diversification

The 3 months correlation between Binance and MSCI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Binance Coin i.e., Binance Coin and MSCI go up and down completely randomly.

Pair Corralation between Binance Coin and MSCI

Assuming the 90 days trading horizon Binance Coin is expected to generate 0.88 times more return on investment than MSCI. However, Binance Coin is 1.14 times less risky than MSCI. It trades about 0.14 of its potential returns per unit of risk. MSCI Inc is currently generating about -0.18 per unit of risk. If you would invest  55,136  in Binance Coin on January 30, 2024 and sell it today you would earn a total of  4,431  from holding Binance Coin or generate 8.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Binance Coin  vs.  MSCI Inc

Binance Coin

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Binance Coin are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Binance Coin exhibited solid returns over the last few months and may actually be approaching a breakup point.

MSCI Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MSCI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Binance Coin and MSCI

The main advantage of trading using opposite Binance Coin and MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, MSCI 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 MSCI will offset losses from the drop in MSCI's long position.

The idea behind Binance Coin and MSCI Inc 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.