Correlation Between BorgWarner and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Jutal Offshore 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 Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Jutal Offshore Oil, you can compare the effects of market volatilities on BorgWarner and Jutal Offshore 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 Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Jutal Offshore.
Diversification Opportunities for BorgWarner and Jutal Offshore
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BorgWarner and Jutal is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of BorgWarner i.e., BorgWarner and Jutal Offshore go up and down completely randomly.
Pair Corralation between BorgWarner and Jutal Offshore
Considering the 90-day investment horizon BorgWarner is expected to under-perform the Jutal Offshore. But the stock apears to be less risky and, when comparing its historical volatility, BorgWarner is 1.99 times less risky than Jutal Offshore. The stock trades about -0.01 of its potential returns per unit of risk. The Jutal Offshore Oil is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,662 in Jutal Offshore Oil on September 4, 2024 and sell it today you would earn a total of 248.00 from holding Jutal Offshore Oil or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.66% |
| Values | Daily Returns |
BorgWarner vs. Jutal Offshore Oil
Performance |
| Timeline |
| BorgWarner |
| Jutal Offshore Oil |
BorgWarner and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Jutal Offshore
The main advantage of trading using opposite BorgWarner and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
| Jutal Offshore vs. Expro Group Holdings | Jutal Offshore vs. ChampionX | Jutal Offshore vs. Ranger Energy Services | Jutal Offshore vs. Cactus Inc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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