Correlation Between LAMB and Binance Coin
Can any of the company-specific risk be diversified away by investing in both LAMB 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 LAMB and Binance Coin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAMB and Binance Coin, you can compare the effects of market volatilities on LAMB 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 LAMB with a short position of Binance Coin. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAMB and Binance Coin.
Diversification Opportunities for LAMB and Binance Coin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LAMB and Binance is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding LAMB and Binance Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binance Coin and LAMB 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 LAMB 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 LAMB i.e., LAMB and Binance Coin go up and down completely randomly.
Pair Corralation between LAMB and Binance Coin
Assuming the 90 days trading horizon LAMB is expected to generate 2.94 times more return on investment than Binance Coin. However, LAMB is 2.94 times more volatile than Binance Coin. It trades about 0.07 of its potential returns per unit of risk. Binance Coin is currently generating about 0.05 per unit of risk. If you would invest 0.31 in LAMB on January 26, 2024 and sell it today you would earn a total of 0.35 from holding LAMB or generate 114.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAMB vs. Binance Coin
Performance |
| Timeline |
| LAMB |
| Binance Coin |
LAMB and Binance Coin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAMB and Binance Coin
The main advantage of trading using opposite LAMB and Binance Coin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAMB 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 LAMB 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |