Correlation Between Lincoln Electric and Solidion Technology
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Solidion Technology 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 Solidion Technology 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 Solidion Technology, you can compare the effects of market volatilities on Lincoln Electric and Solidion Technology 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 Solidion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Solidion Technology.
Diversification Opportunities for Lincoln Electric and Solidion Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lincoln and Solidion is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Solidion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solidion Technology 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 Solidion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solidion Technology has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Solidion Technology go up and down completely randomly.
Pair Corralation between Lincoln Electric and Solidion Technology
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 0.15 times more return on investment than Solidion Technology. However, Lincoln Electric Holdings is 6.48 times less risky than Solidion Technology. It trades about 0.06 of its potential returns per unit of risk. Solidion Technology is currently generating about -0.01 per unit of risk. If you would invest 13,975 in Lincoln Electric Holdings on August 27, 2024 and sell it today you would earn a total of 7,377 from holding Lincoln Electric Holdings or generate 52.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Solidion Technology
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Solidion Technology |
Lincoln Electric and Solidion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Solidion Technology
The main advantage of trading using opposite Lincoln Electric and Solidion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Solidion Technology 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 Solidion Technology will offset losses from the drop in Solidion Technology's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Solidion Technology vs. Procter Gamble | Solidion Technology vs. Lincoln Electric Holdings | Solidion Technology vs. Uber Technologies | Solidion Technology vs. Nextplat 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 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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