Correlation Between Tradeweb Markets and Binah Capital

Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and Binah Capital 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 Tradeweb Markets and Binah Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tradeweb Markets and Binah Capital Group,, you can compare the effects of market volatilities on Tradeweb Markets and Binah Capital 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 Tradeweb Markets with a short position of Binah Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Binah Capital.

Diversification Opportunities for Tradeweb Markets and Binah Capital

-0.36

Correlation Coefficient

Tradeweb Markets  Binah Capital

Very good diversification

The 3 months correlation between Tradeweb and Binah is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and Binah Capital go up and down completely randomly.

Pair Corralation between Tradeweb Markets and Binah Capital

Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 0.2 times more return on investment than Binah Capital. However, Tradeweb Markets is 5.13 times less risky than Binah Capital. It trades about 0.08 of its potential returns per unit of risk. Binah Capital Group, is currently generating about 0.0 per unit of risk. If you would invest  13,048  in Tradeweb Markets on September 17, 2024 and sell it today you would earn a total of  300.00  from holding Tradeweb Markets or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tradeweb Markets  vs.  Binah Capital Group,

Tradeweb Markets

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Tradeweb Markets may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Binah Capital Group,

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Binah Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tradeweb Markets and Binah Capital

The main advantage of trading using opposite Tradeweb Markets and Binah Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets position performs unexpectedly, Binah Capital 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 Binah Capital will offset losses from the drop in Binah Capital's long position.

The idea behind Tradeweb Markets and Binah Capital Group, 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.