Correlation Between Lincoln Electric and 58013MFC3
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By analyzing existing cross correlation between Lincoln Electric Holdings and MCDONALDS P MEDIUM, you can compare the effects of market volatilities on Lincoln Electric and 58013MFC3 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 58013MFC3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and 58013MFC3.
Diversification Opportunities for Lincoln Electric and 58013MFC3
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lincoln and 58013MFC3 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and MCDONALDS P MEDIUM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCDONALDS P MEDIUM 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 58013MFC3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCDONALDS P MEDIUM has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and 58013MFC3 go up and down completely randomly.
Pair Corralation between Lincoln Electric and 58013MFC3
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to under-perform the 58013MFC3. But the stock apears to be less risky and, when comparing its historical volatility, Lincoln Electric Holdings is 1.29 times less risky than 58013MFC3. The stock trades about -0.08 of its potential returns per unit of risk. The MCDONALDS P MEDIUM is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 8,650 in MCDONALDS P MEDIUM on September 13, 2024 and sell it today you would lose (147.00) from holding MCDONALDS P MEDIUM or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. MCDONALDS P MEDIUM
Performance |
| Timeline |
| Lincoln Electric Holdings |
| MCDONALDS P MEDIUM |
Lincoln Electric and 58013MFC3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and 58013MFC3
The main advantage of trading using opposite Lincoln Electric and 58013MFC3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, 58013MFC3 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 58013MFC3 will offset losses from the drop in 58013MFC3'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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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