Correlation Between THR and Binance Coin
Can any of the company-specific risk be diversified away by investing in both THR 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 THR and Binance Coin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THR and Binance Coin, you can compare the effects of market volatilities on THR 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 THR with a short position of Binance Coin. Check out your portfolio center. Please also check ongoing floating volatility patterns of THR and Binance Coin.
Diversification Opportunities for THR and Binance Coin
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between THR and Binance is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding THR and Binance Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binance Coin and THR 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 THR 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 THR i.e., THR and Binance Coin go up and down completely randomly.
Pair Corralation between THR and Binance Coin
Assuming the 90 days trading horizon THR is expected to generate 8.62 times more return on investment than Binance Coin. However, THR is 8.62 times more volatile than Binance Coin. It trades about 0.04 of its potential returns per unit of risk. Binance Coin is currently generating about 0.04 per unit of risk. If you would invest 1,266,600 in THR on January 25, 2024 and sell it today you would lose (216,885) from holding THR or give up 17.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.96% |
| Values | Daily Returns |
THR vs. Binance Coin
Performance |
| Timeline |
| THR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Binance Coin |
THR and Binance Coin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THR and Binance Coin
The main advantage of trading using opposite THR and Binance Coin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THR 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 THR 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |