Correlation Between BorgWarner and Grupo Televisa
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Grupo Televisa 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 Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Grupo Televisa SAB, you can compare the effects of market volatilities on BorgWarner and Grupo Televisa 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 Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Grupo Televisa.
Diversification Opportunities for BorgWarner and Grupo Televisa
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BorgWarner and Grupo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Grupo Televisa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Televisa SAB 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 Grupo Televisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Televisa SAB has no effect on the direction of BorgWarner i.e., BorgWarner and Grupo Televisa go up and down completely randomly.
Pair Corralation between BorgWarner and Grupo Televisa
Considering the 90-day investment horizon BorgWarner is expected to generate 0.56 times more return on investment than Grupo Televisa. However, BorgWarner is 1.77 times less risky than Grupo Televisa. It trades about -0.02 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.08 per unit of risk. If you would invest 3,670 in BorgWarner on September 3, 2024 and sell it today you would lose (238.00) from holding BorgWarner or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BorgWarner vs. Grupo Televisa SAB
Performance |
| Timeline |
| BorgWarner |
| Grupo Televisa SAB |
BorgWarner and Grupo Televisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Grupo Televisa
The main advantage of trading using opposite BorgWarner and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Grupo Televisa 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 Grupo Televisa will offset losses from the drop in Grupo Televisa's long position.| BorgWarner vs. Allison Transmission Holdings | BorgWarner vs. Aptiv PLC | BorgWarner vs. LKQ Corporation | BorgWarner vs. Lear Corporation |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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