Correlation Between CT Real and BorgWarner

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

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

Diversification Opportunities for CT Real and BorgWarner

0.01

Correlation Coefficient

CT Real  BorgWarner

Significant diversification

The 3 months correlation between CTRRF and BorgWarner is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner and CT Real 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 CT Real Estate 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 CT Real i.e., CT Real and BorgWarner go up and down completely randomly.

Pair Corralation between CT Real and BorgWarner

If you would invest  3,344  in BorgWarner on September 2, 2024 and sell it today you would earn a total of  88.00  from holding BorgWarner or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

CT Real Estate  vs.  BorgWarner

CT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CT Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BorgWarner

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BorgWarner are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BorgWarner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CT Real and BorgWarner

The main advantage of trading using opposite CT Real and BorgWarner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CT Real 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 CT Real Estate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..