Correlation Between Lincoln Electric and JABHOL
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By analyzing existing cross correlation between Lincoln Electric Holdings and JABHOL 45 08 APR 52, you can compare the effects of market volatilities on Lincoln Electric and JABHOL 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 JABHOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and JABHOL.
Diversification Opportunities for Lincoln Electric and JABHOL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lincoln and JABHOL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and JABHOL 45 08 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JABHOL 45 08 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 JABHOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JABHOL 45 08 has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and JABHOL go up and down completely randomly.
Pair Corralation between Lincoln Electric and JABHOL
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to under-perform the JABHOL. In addition to that, Lincoln Electric is 1.2 times more volatile than JABHOL 45 08 APR 52. It trades about -0.13 of its total potential returns per unit of risk. JABHOL 45 08 APR 52 is currently generating about 0.23 per unit of volatility. If you would invest 7,600 in JABHOL 45 08 APR 52 on September 12, 2024 and sell it today you would earn a total of 174.00 from holding JABHOL 45 08 APR 52 or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 36.36% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. JABHOL 45 08 APR 52
Performance |
| Timeline |
| Lincoln Electric Holdings |
| JABHOL 45 08 |
Lincoln Electric and JABHOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and JABHOL
The main advantage of trading using opposite Lincoln Electric and JABHOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, JABHOL 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 JABHOL will offset losses from the drop in JABHOL's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Snap On | Lincoln Electric vs. Eastern Co | Lincoln Electric vs. Hillman Solutions Corp |
| JABHOL vs. Toro Co | JABHOL vs. Mid Atlantic Home Health | JABHOL vs. Haverty Furniture Companies | JABHOL vs. Lincoln Electric Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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