Correlation Between Lincoln Electric and Mid Atlantic
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Mid Atlantic 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 Mid Atlantic 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 Mid Atlantic Home Health, you can compare the effects of market volatilities on Lincoln Electric and Mid Atlantic 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 Mid Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Mid Atlantic.
Diversification Opportunities for Lincoln Electric and Mid Atlantic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Mid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Mid Atlantic Home Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Atlantic Home 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 Mid Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Atlantic Home has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Mid Atlantic go up and down completely randomly.
Pair Corralation between Lincoln Electric and Mid Atlantic
If you would invest 20,034 in Lincoln Electric Holdings on August 31, 2024 and sell it today you would earn a total of 1,628 from holding Lincoln Electric Holdings or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Mid Atlantic Home Health
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Mid Atlantic Home |
Lincoln Electric and Mid Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Mid Atlantic
The main advantage of trading using opposite Lincoln Electric and Mid Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Mid Atlantic 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 Mid Atlantic will offset losses from the drop in Mid Atlantic's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Mid Atlantic vs. Pennant Group | Mid Atlantic vs. Encompass Health Corp | Mid Atlantic vs. Enhabit | Mid Atlantic vs. Concord Medical Services |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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