Correlation Between BorgWarner and Carmell Therapeutics
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Carmell Therapeutics 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 Carmell Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Carmell Therapeutics, you can compare the effects of market volatilities on BorgWarner and Carmell Therapeutics 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 Carmell Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Carmell Therapeutics.
Diversification Opportunities for BorgWarner and Carmell Therapeutics
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BorgWarner and Carmell is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Carmell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmell Therapeutics 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 Carmell Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmell Therapeutics has no effect on the direction of BorgWarner i.e., BorgWarner and Carmell Therapeutics go up and down completely randomly.
Pair Corralation between BorgWarner and Carmell Therapeutics
Considering the 90-day investment horizon BorgWarner is expected to generate 129.18 times less return on investment than Carmell Therapeutics. But when comparing it to its historical volatility, BorgWarner is 29.63 times less risky than Carmell Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Carmell Therapeutics is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Carmell Therapeutics on October 24, 2024 and sell it today you would earn a total of 24.00 from holding Carmell Therapeutics or generate 104.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
BorgWarner vs. Carmell Therapeutics
Performance |
| Timeline |
| BorgWarner |
| Carmell Therapeutics |
BorgWarner and Carmell Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Carmell Therapeutics
The main advantage of trading using opposite BorgWarner and Carmell Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Carmell Therapeutics 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 Carmell Therapeutics will offset losses from the drop in Carmell Therapeutics' long position.| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
| Carmell Therapeutics vs. Chester Mining | Carmell Therapeutics vs. Gatos Silver | Carmell Therapeutics vs. Skechers USA | Carmell Therapeutics vs. Weyco Group |
Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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