Correlation Between Lincoln Electric and GROUP
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By analyzing existing cross correlation between Lincoln Electric Holdings and GROUP 1 AUTOMOTIVE, you can compare the effects of market volatilities on Lincoln Electric and GROUP 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 GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and GROUP.
Diversification Opportunities for Lincoln Electric and GROUP
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lincoln and GROUP is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and GROUP 1 AUTOMOTIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GROUP 1 AUTOMOTIVE 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 GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GROUP 1 AUTOMOTIVE has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and GROUP go up and down completely randomly.
Pair Corralation between Lincoln Electric and GROUP
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 2.59 times more return on investment than GROUP. However, Lincoln Electric is 2.59 times more volatile than GROUP 1 AUTOMOTIVE. It trades about 0.02 of its potential returns per unit of risk. GROUP 1 AUTOMOTIVE is currently generating about 0.01 per unit of risk. If you would invest 20,152 in Lincoln Electric Holdings on August 29, 2024 and sell it today you would earn a total of 1,462 from holding Lincoln Electric Holdings or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.38% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. GROUP 1 AUTOMOTIVE
Performance |
| Timeline |
| Lincoln Electric Holdings |
| GROUP 1 AUTOMOTIVE |
Lincoln Electric and GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and GROUP
The main advantage of trading using opposite Lincoln Electric and GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, GROUP 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 GROUP will offset losses from the drop in GROUP's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| GROUP vs. Sphere Entertainment Co | GROUP vs. Radcom | GROUP vs. WiMi Hologram Cloud | GROUP vs. Constellation Brands Class |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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