Correlation Between Compagnie Générale and BorgWarner
Can any of the company-specific risk be diversified away by investing in both Compagnie Générale and BorgWarner 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 Compagnie Générale and BorgWarner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Gnrale des and BorgWarner, you can compare the effects of market volatilities on Compagnie Générale and BorgWarner 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 Compagnie Générale with a short position of BorgWarner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Générale and BorgWarner.
Diversification Opportunities for Compagnie Générale and BorgWarner
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and BorgWarner is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Gnrale des and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner and Compagnie Générale 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 Compagnie Gnrale des are associated (or correlated) with BorgWarner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BorgWarner has no effect on the direction of Compagnie Générale i.e., Compagnie Générale and BorgWarner go up and down completely randomly.
Pair Corralation between Compagnie Générale and BorgWarner
Assuming the 90 days horizon Compagnie Gnrale des is expected to generate 2.1 times more return on investment than BorgWarner. However, Compagnie Générale is 2.1 times more volatile than BorgWarner. It trades about 0.09 of its potential returns per unit of risk. BorgWarner is currently generating about 0.07 per unit of risk. If you would invest 3,306 in Compagnie Gnrale des on November 3, 2024 and sell it today you would earn a total of 152.00 from holding Compagnie Gnrale des or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Compagnie Gnrale des vs. BorgWarner
Performance |
| Timeline |
| Compagnie Gnrale des |
| BorgWarner |
Compagnie Générale and BorgWarner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Générale and BorgWarner
The main advantage of trading using opposite Compagnie Générale and BorgWarner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Générale position performs unexpectedly, BorgWarner 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 BorgWarner will offset losses from the drop in BorgWarner's long position.| Compagnie Générale vs. Continental AG PK | Compagnie Générale vs. Bridgestone Corp ADR | Compagnie Générale vs. Continental Aktiengesellschaft | Compagnie Générale vs. Douglas Dynamics |
| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |