Correlation Between Lincoln Electric and 06406FAC7
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By analyzing existing cross correlation between Lincoln Electric Holdings and BANK NEW YORK, you can compare the effects of market volatilities on Lincoln Electric and 06406FAC7 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 06406FAC7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and 06406FAC7.
Diversification Opportunities for Lincoln Electric and 06406FAC7
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lincoln and 06406FAC7 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and BANK NEW YORK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK NEW YORK 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 06406FAC7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK NEW YORK has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and 06406FAC7 go up and down completely randomly.
Pair Corralation between Lincoln Electric and 06406FAC7
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 1.63 times more return on investment than 06406FAC7. However, Lincoln Electric is 1.63 times more volatile than BANK NEW YORK. It trades about 0.19 of its potential returns per unit of risk. BANK NEW YORK is currently generating about -0.01 per unit of risk. If you would invest 19,584 in Lincoln Electric Holdings on August 29, 2024 and sell it today you would earn a total of 2,030 from holding Lincoln Electric Holdings or generate 10.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. BANK NEW YORK
Performance |
| Timeline |
| Lincoln Electric Holdings |
| BANK NEW YORK |
Lincoln Electric and 06406FAC7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and 06406FAC7
The main advantage of trading using opposite Lincoln Electric and 06406FAC7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, 06406FAC7 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 06406FAC7 will offset losses from the drop in 06406FAC7's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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