Correlation Between Bitcoin Gold and Binance Coin
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold 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 Bitcoin Gold and Binance Coin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and Binance Coin, you can compare the effects of market volatilities on Bitcoin Gold 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 Bitcoin Gold with a short position of Binance Coin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and Binance Coin.
Diversification Opportunities for Bitcoin Gold and Binance Coin
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitcoin and Binance is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Binance Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binance Coin and Bitcoin Gold 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 Bitcoin Gold 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 Bitcoin Gold i.e., Bitcoin Gold and Binance Coin go up and down completely randomly.
Pair Corralation between Bitcoin Gold and Binance Coin
Assuming the 90 days trading horizon Bitcoin Gold is expected to under-perform the Binance Coin. In addition to that, Bitcoin Gold is 1.43 times more volatile than Binance Coin. It trades about -0.17 of its total potential returns per unit of risk. Binance Coin is currently generating about 0.01 per unit of volatility. 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 Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. Binance Coin
Performance |
| Timeline |
| Bitcoin Gold |
| Binance Coin |
Bitcoin Gold and Binance Coin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and Binance Coin
The main advantage of trading using opposite Bitcoin Gold and Binance Coin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold 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.| Bitcoin Gold vs. Bitcoin | Bitcoin Gold vs. Dogecoin | Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Litecoin |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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