Correlation Between BorgWarner and ODDITY Tech
Can any of the company-specific risk be diversified away by investing in both BorgWarner and ODDITY Tech 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 ODDITY Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and ODDITY Tech Ltd, you can compare the effects of market volatilities on BorgWarner and ODDITY Tech 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 ODDITY Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and ODDITY Tech.
Diversification Opportunities for BorgWarner and ODDITY Tech
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BorgWarner and ODDITY is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and ODDITY Tech Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODDITY Tech 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 ODDITY Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODDITY Tech has no effect on the direction of BorgWarner i.e., BorgWarner and ODDITY Tech go up and down completely randomly.
Pair Corralation between BorgWarner and ODDITY Tech
Considering the 90-day investment horizon BorgWarner is expected to generate 13.67 times less return on investment than ODDITY Tech. But when comparing it to its historical volatility, BorgWarner is 2.17 times less risky than ODDITY Tech. It trades about 0.01 of its potential returns per unit of risk. ODDITY Tech Ltd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,622 in ODDITY Tech Ltd on September 12, 2024 and sell it today you would earn a total of 247.00 from holding ODDITY Tech Ltd or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BorgWarner vs. ODDITY Tech Ltd
Performance |
| Timeline |
| BorgWarner |
| ODDITY Tech |
BorgWarner and ODDITY Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and ODDITY Tech
The main advantage of trading using opposite BorgWarner and ODDITY Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, ODDITY Tech 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 ODDITY Tech will offset losses from the drop in ODDITY Tech's long position.| BorgWarner vs. Cooper Stnd | BorgWarner vs. Motorcar Parts of | BorgWarner vs. American Axle Manufacturing | BorgWarner vs. Stoneridge |
| ODDITY Tech vs. Visteon Corp | ODDITY Tech vs. BorgWarner | ODDITY Tech vs. Rivian Automotive | ODDITY Tech vs. Tesla 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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