Correlation Between BorgWarner and Thunder Gold
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Thunder Gold 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 Thunder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Thunder Gold Corp, you can compare the effects of market volatilities on BorgWarner and Thunder Gold 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 Thunder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Thunder Gold.
Diversification Opportunities for BorgWarner and Thunder Gold
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BorgWarner and Thunder is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Thunder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Gold Corp 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 Thunder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Gold Corp has no effect on the direction of BorgWarner i.e., BorgWarner and Thunder Gold go up and down completely randomly.
Pair Corralation between BorgWarner and Thunder Gold
Considering the 90-day investment horizon BorgWarner is expected to under-perform the Thunder Gold. But the stock apears to be less risky and, when comparing its historical volatility, BorgWarner is 10.62 times less risky than Thunder Gold. The stock trades about -0.29 of its potential returns per unit of risk. The Thunder Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5.60 in Thunder Gold Corp on November 27, 2024 and sell it today you would lose (1.35) from holding Thunder Gold Corp or give up 24.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BorgWarner vs. Thunder Gold Corp
Performance |
| Timeline |
| BorgWarner |
| Thunder Gold Corp |
BorgWarner and Thunder Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Thunder Gold
The main advantage of trading using opposite BorgWarner and Thunder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Thunder Gold 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 Thunder Gold will offset losses from the drop in Thunder Gold's long position.| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
| Thunder Gold vs. Elite Education Group | Thunder Gold vs. Vasta Platform | Thunder Gold vs. Pearson PLC ADR | Thunder Gold vs. Barrick Gold Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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