Correlation Between Lincoln Electric and QEP
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and QEP 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 QEP 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 QEP Co Inc, you can compare the effects of market volatilities on Lincoln Electric and QEP 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 QEP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and QEP.
Diversification Opportunities for Lincoln Electric and QEP
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and QEP is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and QEP Co Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QEP Co Inc 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 QEP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QEP Co Inc has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and QEP go up and down completely randomly.
Pair Corralation between Lincoln Electric and QEP
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 | Moves Against |
| Strength | Weak |
| Accuracy | 0.3% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. QEP Co Inc
Performance |
| Timeline |
| Lincoln Electric Holdings |
| QEP Co Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln Electric and QEP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and QEP
The main advantage of trading using opposite Lincoln Electric and QEP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, QEP 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 QEP will offset losses from the drop in QEP's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Snap On | Lincoln Electric vs. Eastern Co | Lincoln Electric vs. Hillman Solutions Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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