Correlation Between Lincoln Electric and CIGNA
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By analyzing existing cross correlation between Lincoln Electric Holdings and CIGNA P, you can compare the effects of market volatilities on Lincoln Electric and CIGNA 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 CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and CIGNA.
Diversification Opportunities for Lincoln Electric and CIGNA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lincoln and CIGNA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and CIGNA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P 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 CIGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIGNA P has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and CIGNA go up and down completely randomly.
Pair Corralation between Lincoln Electric and CIGNA
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 6.02 times more return on investment than CIGNA. However, Lincoln Electric is 6.02 times more volatile than CIGNA P. It trades about 0.0 of its potential returns per unit of risk. CIGNA P is currently generating about 0.0 per unit of risk. If you would invest 21,498 in Lincoln Electric Holdings on September 12, 2024 and sell it today you would lose (598.00) from holding Lincoln Electric Holdings or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. CIGNA P
Performance |
| Timeline |
| Lincoln Electric Holdings |
| CIGNA P |
Lincoln Electric and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and CIGNA
The main advantage of trading using opposite Lincoln Electric and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, CIGNA 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 CIGNA will offset losses from the drop in CIGNA'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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