Correlation Between Binance Coin and Werner Enterprises
Can any of the company-specific risk be diversified away by investing in both Binance Coin and Werner Enterprises 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 Werner Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Werner Enterprises, you can compare the effects of market volatilities on Binance Coin and Werner Enterprises 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 Werner Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Werner Enterprises.
Diversification Opportunities for Binance Coin and Werner Enterprises
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binance and Werner is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Werner Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werner Enterprises 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 Werner Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werner Enterprises has no effect on the direction of Binance Coin i.e., Binance Coin and Werner Enterprises go up and down completely randomly.
Pair Corralation between Binance Coin and Werner Enterprises
Assuming the 90 days trading horizon Binance Coin is expected to generate 1.79 times more return on investment than Werner Enterprises. However, Binance Coin is 1.79 times more volatile than Werner Enterprises. It trades about -0.03 of its potential returns per unit of risk. Werner Enterprises is currently generating about -0.17 per unit of risk. If you would invest 68,861 in Binance Coin on December 25, 2024 and sell it today you would lose (6,176) from holding Binance Coin or give up 8.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.65% |
| Values | Daily Returns |
Binance Coin vs. Werner Enterprises
Performance |
| Timeline |
| Binance Coin |
| Werner Enterprises |
Binance Coin and Werner Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Werner Enterprises
The main advantage of trading using opposite Binance Coin and Werner Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin position performs unexpectedly, Werner Enterprises 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 Werner Enterprises will offset losses from the drop in Werner Enterprises' long position.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Werner Enterprises vs. Heartland Express | Werner Enterprises vs. Universal Logistics Holdings | Werner Enterprises vs. Schneider National | Werner Enterprises vs. Marten Transport |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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