Correlation Between 126408GW7 and BorgWarner

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Can any of the company-specific risk be diversified away by investing in both 126408GW7 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 126408GW7 and BorgWarner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSX P 475 and BorgWarner, you can compare the effects of market volatilities on 126408GW7 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 126408GW7 with a short position of BorgWarner. Check out your portfolio center. Please also check ongoing floating volatility patterns of 126408GW7 and BorgWarner.

Diversification Opportunities for 126408GW7 and BorgWarner

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between 126408GW7 and BorgWarner is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CSX P 475 and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner and 126408GW7 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 CSX P 475 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 126408GW7 i.e., 126408GW7 and BorgWarner go up and down completely randomly.

Pair Corralation between 126408GW7 and BorgWarner

If you would invest  3,451  in BorgWarner on September 24, 2024 and sell it today you would lose (263.00) from holding BorgWarner or give up 7.62% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

CSX P 475  vs.  BorgWarner

 Performance 
       Timeline  
CSX P 475 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days CSX P 475 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 CSX P 475 investors.
BorgWarner 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BorgWarner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

126408GW7 and BorgWarner Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 126408GW7 and BorgWarner

The main advantage of trading using opposite 126408GW7 and BorgWarner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 126408GW7 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 CSX P 475 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..

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