Correlation Between BORGWARNER and Coca Cola
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By analyzing existing cross correlation between BORGWARNER INC 4375 and The Coca Cola, you can compare the effects of market volatilities on BORGWARNER and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORGWARNER and Coca Cola.
Diversification Opportunities for BORGWARNER and Coca Cola
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BORGWARNER and Coca is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BORGWARNER INC 4375 and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 INC 4375 are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of BORGWARNER i.e., BORGWARNER and Coca Cola go up and down completely randomly.
Pair Corralation between BORGWARNER and Coca Cola
Assuming the 90 days trading horizon BORGWARNER INC 4375 is expected to generate 127.1 times more return on investment than Coca Cola. However, BORGWARNER is 127.1 times more volatile than The Coca Cola. It trades about 0.09 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.04 per unit of risk. If you would invest 7,914 in BORGWARNER INC 4375 on August 31, 2024 and sell it today you would lose (695.00) from holding BORGWARNER INC 4375 or give up 8.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 48.4% |
| Values | Daily Returns |
BORGWARNER INC 4375 vs. The Coca Cola
Performance |
| Timeline |
| BORGWARNER INC 4375 |
| Coca Cola |
BORGWARNER and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORGWARNER and Coca Cola
The main advantage of trading using opposite BORGWARNER and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORGWARNER position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| BORGWARNER vs. AEP TEX INC | BORGWARNER vs. US BANK NATIONAL | BORGWARNER vs. Bank of America | BORGWARNER vs. GE Aerospace |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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