Correlation Between BorgWarner and SYN Prop

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

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

Diversification Opportunities for BorgWarner and SYN Prop

-0.77

Correlation Coefficient

BorgWarner  SYN Prop

Pay attention - limited upside

The 3 months correlation between BorgWarner and SYN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and SYN prop e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN prop e and BorgWarner 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 BorgWarner are associated (or correlated) with SYN Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN prop e has no effect on the direction of BorgWarner i.e., BorgWarner and SYN Prop go up and down completely randomly.

Pair Corralation between BorgWarner and SYN Prop

Considering the 90-day investment horizon BorgWarner is expected to under-perform the SYN Prop. But the stock apears to be less risky and, when comparing its historical volatility, BorgWarner is 9.55 times less risky than SYN Prop. The stock trades about -0.09 of its potential returns per unit of risk. The SYN prop e is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  153.00  in SYN prop e on October 8, 2024 and sell it today you would earn a total of  373.00  from holding SYN prop e or generate 243.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

BorgWarner  vs.  SYN prop e

BorgWarner

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BorgWarner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SYN prop e

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SYN prop e are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, SYN Prop showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BorgWarner and SYN Prop

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

The idea behind BorgWarner and SYN prop e 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.