Correlation Between Lincoln Electric and CROWN

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Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and CROWN 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 CROWN 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 CROWN CASTLE INTERNATIONAL, you can compare the effects of market volatilities on Lincoln Electric and CROWN 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 CROWN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and CROWN.

Diversification Opportunities for Lincoln Electric and CROWN

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Lincoln and CROWN is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and CROWN CASTLE INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTERNA 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTERNA has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and CROWN go up and down completely randomly.

Pair Corralation between Lincoln Electric and CROWN

Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 1.26 times more return on investment than CROWN. However, Lincoln Electric is 1.26 times more volatile than CROWN CASTLE INTERNATIONAL. It trades about 0.12 of its potential returns per unit of risk. CROWN CASTLE INTERNATIONAL is currently generating about -0.24 per unit of risk. If you would invest  19,615  in Lincoln Electric Holdings on November 29, 2024 and sell it today you would earn a total of  1,165  from holding Lincoln Electric Holdings or generate 5.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lincoln Electric Holdings  vs.  CROWN CASTLE INTERNATIONAL

 Performance 
       Timeline  
Lincoln Electric Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Lincoln Electric Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Lincoln Electric is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
CROWN CASTLE INTERNA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CROWN CASTLE INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for CROWN CASTLE INTERNATIONAL investors.

Lincoln Electric and CROWN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lincoln Electric and CROWN

The main advantage of trading using opposite Lincoln Electric and CROWN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, CROWN 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 CROWN will offset losses from the drop in CROWN's long position.
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The idea behind Lincoln Electric Holdings and CROWN CASTLE INTERNATIONAL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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