Correlation Between BorgWarner and APPLE
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By analyzing existing cross correlation between BorgWarner and APPLE INC, you can compare the effects of market volatilities on BorgWarner and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and APPLE.
Diversification Opportunities for BorgWarner and APPLE
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BorgWarner and APPLE is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC has no effect on the direction of BorgWarner i.e., BorgWarner and APPLE go up and down completely randomly.
Pair Corralation between BorgWarner and APPLE
Considering the 90-day investment horizon BorgWarner is expected to generate 2.52 times more return on investment than APPLE. However, BorgWarner is 2.52 times more volatile than APPLE INC. It trades about 0.07 of its potential returns per unit of risk. APPLE INC is currently generating about -0.18 per unit of risk. If you would invest 3,441 in BorgWarner on August 28, 2024 and sell it today you would earn a total of 77.00 from holding BorgWarner or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BorgWarner vs. APPLE INC
Performance |
| Timeline |
| BorgWarner |
| APPLE INC |
BorgWarner and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and APPLE
The main advantage of trading using opposite BorgWarner and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.The idea behind BorgWarner and APPLE INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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