Correlation Between Golden Matrix and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Golden Matrix 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 Golden Matrix and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Matrix Group and Lincoln Electric Holdings, you can compare the effects of market volatilities on Golden Matrix 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 Golden Matrix with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Matrix and Lincoln Electric.
Diversification Opportunities for Golden Matrix and Lincoln Electric
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Lincoln is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group 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 Golden Matrix 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 Golden Matrix Group 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 Golden Matrix i.e., Golden Matrix and Lincoln Electric go up and down completely randomly.
Pair Corralation between Golden Matrix and Lincoln Electric
Given the investment horizon of 90 days Golden Matrix Group is expected to generate 3.42 times more return on investment than Lincoln Electric. However, Golden Matrix is 3.42 times more volatile than Lincoln Electric Holdings. It trades about 0.03 of its potential returns per unit of risk. Lincoln Electric Holdings is currently generating about 0.06 per unit of risk. If you would invest 230.00 in Golden Matrix Group on August 24, 2024 and sell it today you would earn a total of 40.00 from holding Golden Matrix Group or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Matrix Group vs. Lincoln Electric Holdings
Performance |
| Timeline |
| Golden Matrix Group |
| Lincoln Electric Holdings |
Golden Matrix and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Matrix and Lincoln Electric
The main advantage of trading using opposite Golden Matrix and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Matrix 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.| Golden Matrix vs. i3 Interactive | Golden Matrix vs. GameSquare Holdings | Golden Matrix vs. Playstudios | Golden Matrix vs. Snail, Class A |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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