Correlation Between Lincoln Electric and Artisan Partners
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Artisan Partners 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 Artisan Partners 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 Artisan Partners Asset, you can compare the effects of market volatilities on Lincoln Electric and Artisan Partners 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 Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Artisan Partners.
Diversification Opportunities for Lincoln Electric and Artisan Partners
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lincoln and Artisan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset 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 Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Artisan Partners go up and down completely randomly.
Pair Corralation between Lincoln Electric and Artisan Partners
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 1.11 times more return on investment than Artisan Partners. However, Lincoln Electric is 1.11 times more volatile than Artisan Partners Asset. It trades about 0.18 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.2 per unit of risk. If you would invest 19,726 in Lincoln Electric Holdings on August 31, 2024 and sell it today you would earn a total of 1,936 from holding Lincoln Electric Holdings or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Artisan Partners Asset
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Artisan Partners Asset |
Lincoln Electric and Artisan Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Artisan Partners
The main advantage of trading using opposite Lincoln Electric and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Artisan Partners 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 Artisan Partners will offset losses from the drop in Artisan Partners' long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. NXG NextGen Infrastructure |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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