Correlation Between Lincoln Electric and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Avient 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 Avient 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 Avient Corp, you can compare the effects of market volatilities on Lincoln Electric and Avient 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 Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Avient Corp.
Diversification Opportunities for Lincoln Electric and Avient Corp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lincoln and Avient is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient 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 Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Avient Corp go up and down completely randomly.
Pair Corralation between Lincoln Electric and Avient Corp
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 1.17 times more return on investment than Avient Corp. However, Lincoln Electric is 1.17 times more volatile than Avient Corp. It trades about -0.08 of its potential returns per unit of risk. Avient Corp is currently generating about -0.14 per unit of risk. If you would invest 21,454 in Lincoln Electric Holdings on September 13, 2024 and sell it today you would lose (546.00) from holding Lincoln Electric Holdings or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Avient Corp
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Avient Corp |
Lincoln Electric and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Avient Corp
The main advantage of trading using opposite Lincoln Electric and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Avient 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |