Correlation Between Binance Coin and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Westinghouse Air 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 Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Westinghouse Air Brake, you can compare the effects of market volatilities on Binance Coin and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Westinghouse Air.
Diversification Opportunities for Binance Coin and Westinghouse Air
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binance and Westinghouse is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Binance Coin i.e., Binance Coin and Westinghouse Air go up and down completely randomly.
Pair Corralation between Binance Coin and Westinghouse Air
Assuming the 90 days trading horizon Binance Coin is expected to generate 1.85 times more return on investment than Westinghouse Air. However, Binance Coin is 1.85 times more volatile than Westinghouse Air Brake. It trades about -0.03 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about -0.3 per unit of risk. If you would invest 71,176 in Binance Coin on October 11, 2024 and sell it today you would lose (1,586) from holding Binance Coin or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.36% |
| Values | Daily Returns |
Binance Coin vs. Westinghouse Air Brake
Performance |
| Timeline |
| Binance Coin |
| Westinghouse Air Brake |
Binance Coin and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Westinghouse Air
The main advantage of trading using opposite Binance Coin and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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