Correlation Between BorgWarner and Xos Equity
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Xos Equity 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 Xos Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Xos Equity Warrants, you can compare the effects of market volatilities on BorgWarner and Xos Equity 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 Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Xos Equity.
Diversification Opportunities for BorgWarner and Xos Equity
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BorgWarner and Xos is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants 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 Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of BorgWarner i.e., BorgWarner and Xos Equity go up and down completely randomly.
Pair Corralation between BorgWarner and Xos Equity
Considering the 90-day investment horizon BorgWarner is expected to generate 0.09 times more return on investment than Xos Equity. However, BorgWarner is 10.81 times less risky than Xos Equity. It trades about 0.06 of its potential returns per unit of risk. Xos Equity Warrants is currently generating about -0.08 per unit of risk. If you would invest 3,345 in BorgWarner on August 25, 2024 and sell it today you would earn a total of 67.00 from holding BorgWarner or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BorgWarner vs. Xos Equity Warrants
Performance |
| Timeline |
| BorgWarner |
| Xos Equity Warrants |
BorgWarner and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Xos Equity
The main advantage of trading using opposite BorgWarner and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.| BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation | BorgWarner vs. Stoneridge | BorgWarner vs. Autoliv |
| Xos Equity vs. Fox Factory Holding | Xos Equity vs. LKQ Corporation | Xos Equity vs. Stoneridge | Xos Equity vs. Autoliv |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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