Correlation Between BorgWarner and Hesai Group
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Hesai Group American, you can compare the effects of market volatilities on BorgWarner and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Hesai Group.
Diversification Opportunities for BorgWarner and Hesai Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BorgWarner and Hesai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of BorgWarner i.e., BorgWarner and Hesai Group go up and down completely randomly.
Pair Corralation between BorgWarner and Hesai Group
Considering the 90-day investment horizon BorgWarner is expected to generate 24.54 times less return on investment than Hesai Group. But when comparing it to its historical volatility, BorgWarner is 2.41 times less risky than Hesai Group. It trades about 0.0 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 426.00 in Hesai Group American on August 23, 2024 and sell it today you would earn a total of 35.00 from holding Hesai Group American or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BorgWarner vs. Hesai Group American
Performance |
| Timeline |
| BorgWarner |
| Hesai Group American |
BorgWarner and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Hesai Group
The main advantage of trading using opposite BorgWarner and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
| Hesai Group vs. Garrett Motion | Hesai Group vs. Magna International | Hesai Group vs. Miller Industries | Hesai Group vs. Modine Manufacturing |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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