Correlation Between Lincoln Electric and World Houseware
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and World Houseware 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 World Houseware 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 World Houseware Limited, you can compare the effects of market volatilities on Lincoln Electric and World Houseware 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 World Houseware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and World Houseware.
Diversification Opportunities for Lincoln Electric and World Houseware
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and World is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and World Houseware Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Houseware 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 World Houseware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Houseware has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and World Houseware go up and down completely randomly.
Pair Corralation between Lincoln Electric and World Houseware
If you would invest 19,584 in Lincoln Electric Holdings on August 29, 2024 and sell it today you would earn a total of 2,078 from holding Lincoln Electric Holdings or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. World Houseware Limited
Performance |
| Timeline |
| Lincoln Electric Holdings |
| World Houseware |
Lincoln Electric and World Houseware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and World Houseware
The main advantage of trading using opposite Lincoln Electric and World Houseware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, World Houseware 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 World Houseware will offset losses from the drop in World Houseware's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| World Houseware vs. Trane Technologies plc | World Houseware vs. Carrier Global Corp | World Houseware vs. Johnson Controls International | World Houseware vs. Daikin IndustriesLtd |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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