Correlation Between 105340AR4 and BorgWarner

Can any of the company-specific risk be diversified away by investing in both 105340AR4 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 105340AR4 and BorgWarner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BDN 755 15 MAR 28 and BorgWarner, you can compare the effects of market volatilities on 105340AR4 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 105340AR4 with a short position of BorgWarner. Check out your portfolio center. Please also check ongoing floating volatility patterns of 105340AR4 and BorgWarner.

Diversification Opportunities for 105340AR4 and BorgWarner

0.43

Correlation Coefficient

105340AR4  BorgWarner

Very weak diversification

The 3 months correlation between 105340AR4 and BorgWarner is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding BDN 755 15 MAR 28 and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner and 105340AR4 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 BDN 755 15 MAR 28 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 105340AR4 i.e., 105340AR4 and BorgWarner go up and down completely randomly.

Pair Corralation between 105340AR4 and BorgWarner

Assuming the 90 days trading horizon 105340AR4 is expected to generate 7.89 times less return on investment than BorgWarner. But when comparing it to its historical volatility, BDN 755 15 MAR 28 is 1.56 times less risky than BorgWarner. It trades about 0.0 of its potential returns per unit of risk. BorgWarner is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,428  in BorgWarner on October 9, 2024 and sell it today you would lose (200.00) from holding BorgWarner or give up 5.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.0%
Values	Daily Returns

BDN 755 15 MAR 28  vs.  BorgWarner

BDN 755 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BDN 755 15 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BDN 755 15 MAR 28 investors.

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.

Pair Trading with 105340AR4 and BorgWarner

The main advantage of trading using opposite 105340AR4 and BorgWarner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 105340AR4 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 BDN 755 15 MAR 28 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 CEOs Directory module to screen CEOs from public companies around the world.