Correlation Between Binance Coin and Bitcoin Cash
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Bitcoin Cash 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 Bitcoin Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Bitcoin Cash, you can compare the effects of market volatilities on Binance Coin and Bitcoin Cash 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 Bitcoin Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Bitcoin Cash.
Diversification Opportunities for Binance Coin and Bitcoin Cash
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and Bitcoin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Cash 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 Bitcoin Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Cash has no effect on the direction of Binance Coin i.e., Binance Coin and Bitcoin Cash go up and down completely randomly.
Pair Corralation between Binance Coin and Bitcoin Cash
Assuming the 90 days trading horizon Binance Coin is expected to generate 0.55 times more return on investment than Bitcoin Cash. However, Binance Coin is 1.82 times less risky than Bitcoin Cash. It trades about 0.22 of its potential returns per unit of risk. Bitcoin Cash is currently generating about 0.11 per unit of risk. If you would invest 22,562 in Binance Coin on January 25, 2024 and sell it today you would earn a total of 38,058 from holding Binance Coin or generate 168.68% 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. Bitcoin Cash
Performance |
Timeline |
Binance Coin |
Bitcoin Cash |
Binance Coin and Bitcoin Cash Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Binance Coin and Bitcoin Cash
The main advantage of trading using opposite Binance Coin and Bitcoin Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Bitcoin Cash 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 Bitcoin Cash will offset losses from the drop in Bitcoin Cash's long position.Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
Bitcoin Cash vs. Bitcoin | Bitcoin Cash vs. Dogecoin | Bitcoin Cash vs. Litecoin | Bitcoin Cash vs. Ethereum Classic |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |