Correlation Between Getty Images and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Getty Images and Lincoln Electric 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 Getty Images and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Lincoln Electric Holdings, you can compare the effects of market volatilities on Getty Images and Lincoln Electric 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 Getty Images with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Lincoln Electric.
Diversification Opportunities for Getty Images and Lincoln Electric
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Getty and Lincoln is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Lincoln Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Electric Holdings and Getty Images 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 Getty Images Holdings are associated (or correlated) with Lincoln Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Electric Holdings has no effect on the direction of Getty Images i.e., Getty Images and Lincoln Electric go up and down completely randomly.
Pair Corralation between Getty Images and Lincoln Electric
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Lincoln Electric. In addition to that, Getty Images is 2.06 times more volatile than Lincoln Electric Holdings. It trades about -0.05 of its total potential returns per unit of risk. Lincoln Electric Holdings is currently generating about 0.03 per unit of volatility. If you would invest 20,200 in Lincoln Electric Holdings on September 2, 2024 and sell it today you would earn a total of 1,648 from holding Lincoln Electric Holdings or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Lincoln Electric Holdings
Performance |
| Timeline |
| Getty Images Holdings |
| Lincoln Electric Holdings |
Getty Images and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Lincoln Electric
The main advantage of trading using opposite Getty Images and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Lincoln Electric 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 Lincoln Electric will offset losses from the drop in Lincoln Electric's long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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