Correlation Between Lincoln Electric and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Valneva SE 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 Valneva SE 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 Valneva SE ADR, you can compare the effects of market volatilities on Lincoln Electric and Valneva SE 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 Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Valneva SE.
Diversification Opportunities for Lincoln Electric and Valneva SE
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Valneva is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Valneva SE go up and down completely randomly.
Pair Corralation between Lincoln Electric and Valneva SE
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 0.53 times more return on investment than Valneva SE. However, Lincoln Electric Holdings is 1.88 times less risky than Valneva SE. It trades about 0.04 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.11 per unit of risk. If you would invest 18,300 in Lincoln Electric Holdings on August 29, 2024 and sell it today you would earn a total of 3,362 from holding Lincoln Electric Holdings or generate 18.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Valneva SE ADR
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Valneva SE ADR |
Lincoln Electric and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Valneva SE
The main advantage of trading using opposite Lincoln Electric and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Valneva SE 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 Valneva SE will offset losses from the drop in Valneva SE's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| Valneva SE vs. Bright Minds Biosciences | Valneva SE vs. HP Inc | Valneva SE vs. Intel | Valneva SE vs. Chevron 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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