Correlation Between Lincoln Electric and Granite Falls
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Granite Falls 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 Granite Falls 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 Granite Falls Energy, you can compare the effects of market volatilities on Lincoln Electric and Granite Falls 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 Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Granite Falls.
Diversification Opportunities for Lincoln Electric and Granite Falls
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lincoln and Granite is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy 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 Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Granite Falls go up and down completely randomly.
Pair Corralation between Lincoln Electric and Granite Falls
If you would invest 19,256 in Lincoln Electric Holdings on September 1, 2024 and sell it today you would earn a total of 2,592 from holding Lincoln Electric Holdings or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Granite Falls Energy
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Granite Falls Energy |
Lincoln Electric and Granite Falls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Granite Falls
The main advantage of trading using opposite Lincoln Electric and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.| Lincoln Electric vs. Hillman Solutions Corp | Lincoln Electric vs. AB SKF | Lincoln Electric vs. Kennametal |
| Granite Falls vs. European Wax Center | Granite Falls vs. Lincoln Electric Holdings | Granite Falls vs. Ardelyx | Granite Falls vs. Mink Therapeutics |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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