Correlation Between Lincoln Electric and Joh Friedrich
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Joh Friedrich 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 Joh Friedrich 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 Joh Friedrich Behrens, you can compare the effects of market volatilities on Lincoln Electric and Joh Friedrich 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 Joh Friedrich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Joh Friedrich.
Diversification Opportunities for Lincoln Electric and Joh Friedrich
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Joh is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Joh Friedrich Behrens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joh Friedrich Behrens 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 Joh Friedrich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joh Friedrich Behrens has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Joh Friedrich go up and down completely randomly.
Pair Corralation between Lincoln Electric and Joh Friedrich
If you would invest 18,300 in Lincoln Electric Holdings on September 4, 2024 and sell it today you would earn a total of 2,300 from holding Lincoln Electric Holdings or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Joh Friedrich Behrens
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Joh Friedrich Behrens |
Lincoln Electric and Joh Friedrich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Joh Friedrich
The main advantage of trading using opposite Lincoln Electric and Joh Friedrich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Joh Friedrich 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 Joh Friedrich will offset losses from the drop in Joh Friedrich's long position.| Lincoln Electric vs. FAST RETAIL ADR | Lincoln Electric vs. BE Semiconductor Industries | Lincoln Electric vs. MagnaChip Semiconductor Corp | Lincoln Electric vs. FLOW TRADERS LTD |
| Joh Friedrich vs. Snap on Incorporated | Joh Friedrich vs. Stanley Black Decker | Joh Friedrich vs. Toro Co | Joh Friedrich 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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