Correlation Between Lincoln Electric and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Akanda Corp 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 Lincoln Electric and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln Electric Holdings and Akanda Corp, you can compare the effects of market volatilities on Lincoln Electric and Akanda Corp 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 Lincoln Electric with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Akanda Corp.
Diversification Opportunities for Lincoln Electric and Akanda Corp
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Akanda is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Lincoln Electric 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 Lincoln Electric Holdings are associated (or correlated) with Akanda Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akanda Corp has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Akanda Corp go up and down completely randomly.
Pair Corralation between Lincoln Electric and Akanda Corp
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 0.18 times more return on investment than Akanda Corp. However, Lincoln Electric Holdings is 5.54 times less risky than Akanda Corp. It trades about 0.02 of its potential returns per unit of risk. Akanda Corp is currently generating about -0.07 per unit of risk. If you would invest 20,402 in Lincoln Electric Holdings on September 3, 2024 and sell it today you would earn a total of 1,352 from holding Lincoln Electric Holdings or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Akanda Corp
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Akanda Corp |
Lincoln Electric and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Akanda Corp
The main advantage of trading using opposite Lincoln Electric and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Akanda Corp 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 Akanda Corp will offset losses from the drop in Akanda Corp's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. Timken Company |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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