Correlation Between Anterix and BorgWarner

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

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

Diversification Opportunities for Anterix and BorgWarner

-0.42

Correlation Coefficient

Anterix  BorgWarner

Very good diversification

The 3 months correlation between Anterix and BorgWarner is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner and Anterix 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 Anterix are associated (or correlated) with BorgWarner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BorgWarner has no effect on the direction of Anterix i.e., Anterix and BorgWarner go up and down completely randomly.

Pair Corralation between Anterix and BorgWarner

Given the investment horizon of 90 days Anterix is expected to generate 1.65 times more return on investment than BorgWarner. However, Anterix is 1.65 times more volatile than BorgWarner. It trades about 0.04 of its potential returns per unit of risk. BorgWarner is currently generating about 0.0 per unit of risk. If you would invest  2,874  in Anterix on December 7, 2024 and sell it today you would earn a total of  1,051  from holding Anterix or generate 36.57% return on investment over 90 days.

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

Anterix  vs.  BorgWarner

Anterix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anterix are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Anterix showed solid returns over the last few months and may actually be approaching a breakup point.

BorgWarner

Risk-Adjusted Performance

Very Weak

Over the last 90 days BorgWarner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Anterix and BorgWarner

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

The idea behind Anterix and BorgWarner 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..