Correlation Between Aisin and Lear

Can any of the company-specific risk be diversified away by investing in both Aisin and Lear 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 Aisin and Lear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aisin and Lear Corporation, you can compare the effects of market volatilities on Aisin and Lear 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 Aisin with a short position of Lear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aisin and Lear.

Diversification Opportunities for Aisin and Lear

0.0

Correlation Coefficient

Aisin  Lear

Pay attention - limited upside

The 3 months correlation between Aisin and Lear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aisin and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear and Aisin 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 Aisin are associated (or correlated) with Lear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lear has no effect on the direction of Aisin i.e., Aisin and Lear go up and down completely randomly.

Pair Corralation between Aisin and Lear

If you would invest  9,629  in Lear Corporation on September 5, 2024 and sell it today you would earn a total of  470.00  from holding Lear Corporation or generate 4.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Aisin  vs.  Lear Corp.

Aisin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aisin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Aisin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lear Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Aisin and Lear

The main advantage of trading using opposite Aisin and Lear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aisin position performs unexpectedly, Lear 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 Lear will offset losses from the drop in Lear's long position.

The idea behind Aisin and Lear Corporation 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.