Correlation Between Lincoln Electric and Deutsche Lufthansa
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Deutsche Lufthansa 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 Deutsche Lufthansa 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 Deutsche Lufthansa AG, you can compare the effects of market volatilities on Lincoln Electric and Deutsche Lufthansa 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 Deutsche Lufthansa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Deutsche Lufthansa.
Diversification Opportunities for Lincoln Electric and Deutsche Lufthansa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Deutsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Deutsche Lufthansa AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Lufthansa 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 Deutsche Lufthansa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Lufthansa has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Deutsche Lufthansa go up and down completely randomly.
Pair Corralation between Lincoln Electric and Deutsche Lufthansa
If you would invest 18,260 in Lincoln Electric Holdings on September 12, 2024 and sell it today you would earn a total of 2,694 from holding Lincoln Electric Holdings or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Deutsche Lufthansa AG
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Deutsche Lufthansa |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln Electric and Deutsche Lufthansa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Deutsche Lufthansa
The main advantage of trading using opposite Lincoln Electric and Deutsche Lufthansa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Deutsche Lufthansa 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 Deutsche Lufthansa will offset losses from the drop in Deutsche Lufthansa's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Snap On | Lincoln Electric vs. Eastern Co | Lincoln Electric vs. Hillman Solutions Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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