Correlation Between Lincoln Electric and Entegris
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Entegris 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 Entegris 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 Entegris, you can compare the effects of market volatilities on Lincoln Electric and Entegris 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 Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Entegris.
Diversification Opportunities for Lincoln Electric and Entegris
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lincoln and Entegris is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris 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 Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Entegris go up and down completely randomly.
Pair Corralation between Lincoln Electric and Entegris
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 0.93 times more return on investment than Entegris. However, Lincoln Electric Holdings is 1.08 times less risky than Entegris. It trades about 0.19 of its potential returns per unit of risk. Entegris is currently generating about 0.01 per unit of risk. If you would invest 19,584 in Lincoln Electric Holdings on August 29, 2024 and sell it today you would earn a total of 2,030 from holding Lincoln Electric Holdings or generate 10.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Entegris
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Entegris |
Lincoln Electric and Entegris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Entegris
The main advantage of trading using opposite Lincoln Electric and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Entegris 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 Entegris will offset losses from the drop in Entegris' long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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