This module allows you to analyze existing cross correlation between Lear Corporation and Johnson Controls International plc. You can compare the effects of market volatilities on Lear and Johnson Controls 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 Lear with a short position of Johnson Controls. See also your portfolio center
. Please also check ongoing floating volatility patterns of Lear
and Johnson Controls
Lear Corp. vs Johnson Controls International
Considering 30-days investment horizon, Lear Corporation is expected to generate 0.74 times more return on investment than Johnson Controls. However, Lear Corporation is 1.36 times less risky than Johnson Controls. It trades about 0.04 of its potential returns per unit of risk. Johnson Controls International plc is currently generating about -0.29 per unit of risk. If you would invest 14,403 in Lear Corporation on July 24, 2017 and sell it today you would earn a total of 151.00 from holding Lear Corporation or generate 1.05% return on investment over 30 days.
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Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding Lear Corp. and Johnson Controls International in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Johnson Controls Int and Lear 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 Lear Corporation are associated (or correlated) with Johnson Controls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Controls Int has no effect on the direction of Lear i.e. Lear and Johnson Controls go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in Lear Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days.
Over the last 30 days Johnson Controls International plc has generated negative risk-adjusted returns adding no value to investors with long positions.