Correlation Between Cooper Stnd and Lear

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

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

Diversification Opportunities for Cooper Stnd and Lear

0.35

Correlation Coefficient

Cooper Stnd  Lear

Weak diversification

The 3 months correlation between Cooper and Lear is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Stnd and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear and Cooper Stnd 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 Cooper Stnd 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 Cooper Stnd i.e., Cooper Stnd and Lear go up and down completely randomly.

Pair Corralation between Cooper Stnd and Lear

Considering the 90-day investment horizon Cooper Stnd is expected to under-perform the Lear. In addition to that, Cooper Stnd is 2.65 times more volatile than Lear Corporation. It trades about 0.0 of its total potential returns per unit of risk. Lear Corporation is currently generating about 0.02 per unit of volatility. If you would invest  9,711  in Lear Corporation on November 28, 2024 and sell it today you would earn a total of  88.00  from holding Lear Corporation or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cooper Stnd  vs.  Lear Corp.

Cooper Stnd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cooper Stnd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cooper Stnd is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Lear

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lear Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Lear is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cooper Stnd and Lear

The main advantage of trading using opposite Cooper Stnd and Lear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Stnd 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 Cooper Stnd 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..