Correlation Between BorgWarner and Yokohama Rubber
Can any of the company-specific risk be diversified away by investing in both BorgWarner and Yokohama Rubber 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 Yokohama Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and The Yokohama Rubber, you can compare the effects of market volatilities on BorgWarner and Yokohama Rubber 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 Yokohama Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Yokohama Rubber.
Diversification Opportunities for BorgWarner and Yokohama Rubber
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BorgWarner and Yokohama is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and The Yokohama Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokohama Rubber 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 Yokohama Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokohama Rubber has no effect on the direction of BorgWarner i.e., BorgWarner and Yokohama Rubber go up and down completely randomly.
Pair Corralation between BorgWarner and Yokohama Rubber
If you would invest 3,345 in BorgWarner on September 4, 2024 and sell it today you would earn a total of 87.00 from holding BorgWarner or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
BorgWarner vs. The Yokohama Rubber
Performance |
| Timeline |
| BorgWarner |
| Yokohama Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BorgWarner and Yokohama Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Yokohama Rubber
The main advantage of trading using opposite BorgWarner and Yokohama Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner position performs unexpectedly, Yokohama Rubber 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 Yokohama Rubber will offset losses from the drop in Yokohama Rubber's long position.| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
| Yokohama Rubber vs. BorgWarner | Yokohama Rubber vs. American Axle Manufacturing | Yokohama Rubber vs. Magna International | Yokohama Rubber vs. Dana 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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