Correlation Between Binance Coin and MCO
Can any of the company-specific risk be diversified away by investing in both Binance Coin and MCO 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 MCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and MCO, you can compare the effects of market volatilities on Binance Coin and MCO 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 MCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and MCO.
Diversification Opportunities for Binance Coin and MCO
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Binance and MCO is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and MCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCO 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 MCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCO has no effect on the direction of Binance Coin i.e., Binance Coin and MCO go up and down completely randomly.
Pair Corralation between Binance Coin and MCO
Assuming the 90 days trading horizon Binance Coin is expected to generate 20.84 times less return on investment than MCO. But when comparing it to its historical volatility, Binance Coin is 19.02 times less risky than MCO. It trades about 0.06 of its potential returns per unit of risk. MCO is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 493.00 in MCO on January 25, 2024 and sell it today you would earn a total of 832.00 from holding MCO or generate 168.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binance Coin vs. MCO
Performance |
| Timeline |
| Binance Coin |
| MCO |
Binance Coin and MCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and MCO
The main advantage of trading using opposite Binance Coin and MCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, MCO 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 MCO will offset losses from the drop in MCO's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. XCAD Network | Binance Coin vs. Phala Network | Binance Coin vs. EOSDAC |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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