Correlation Between Lincoln Electric and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Bridgetown Holdings 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 Bridgetown Holdings 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 Bridgetown Holdings, you can compare the effects of market volatilities on Lincoln Electric and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Bridgetown Holdings.
Diversification Opportunities for Lincoln Electric and Bridgetown Holdings
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lincoln and Bridgetown is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Lincoln Electric and Bridgetown Holdings
If you would invest 21.00 in Bridgetown Holdings on October 10, 2024 and sell it today you would earn a total of 0.00 from holding Bridgetown Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Bridgetown Holdings
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln Electric and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Bridgetown Holdings
The main advantage of trading using opposite Lincoln Electric and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Bridgetown Holdings vs. Radcom | Bridgetown Holdings vs. Lipocine | Bridgetown Holdings vs. Playa Hotels Resorts | Bridgetown Holdings vs. RCI Hospitality Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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