Correlation Between Binance Coin and BTS
Can any of the company-specific risk be diversified away by investing in both Binance Coin and BTS 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 BTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and BTS, you can compare the effects of market volatilities on Binance Coin and BTS 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 BTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and BTS.
Diversification Opportunities for Binance Coin and BTS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Binance and BTS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and BTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS 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 BTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS has no effect on the direction of Binance Coin i.e., Binance Coin and BTS go up and down completely randomly.
Pair Corralation between Binance Coin and BTS
Assuming the 90 days trading horizon Binance Coin is expected to generate 0.39 times more return on investment than BTS. However, Binance Coin is 2.57 times less risky than BTS. It trades about 0.01 of its potential returns per unit of risk. BTS is currently generating about -0.09 per unit of risk. If you would invest 55,368 in Binance Coin on January 20, 2024 and sell it today you would lose (358.00) from holding Binance Coin or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binance Coin vs. BTS
Performance |
| Timeline |
| Binance Coin |
| BTS |
Binance Coin and BTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and BTS
The main advantage of trading using opposite Binance Coin and BTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, BTS 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 BTS will offset losses from the drop in BTS'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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