Correlation Between Mannatech Incorporated and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Mannatech Incorporated and Lincoln Electric 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 Mannatech Incorporated and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mannatech Incorporated and Lincoln Electric Holdings, you can compare the effects of market volatilities on Mannatech Incorporated and Lincoln Electric 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 Mannatech Incorporated with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mannatech Incorporated and Lincoln Electric.
Diversification Opportunities for Mannatech Incorporated and Lincoln Electric
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mannatech and Lincoln is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mannatech Incorporated and Lincoln Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Electric Holdings and Mannatech Incorporated 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 Mannatech Incorporated are associated (or correlated) with Lincoln Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Electric Holdings has no effect on the direction of Mannatech Incorporated i.e., Mannatech Incorporated and Lincoln Electric go up and down completely randomly.
Pair Corralation between Mannatech Incorporated and Lincoln Electric
Given the investment horizon of 90 days Mannatech Incorporated is expected to generate 38.15 times more return on investment than Lincoln Electric. However, Mannatech Incorporated is 38.15 times more volatile than Lincoln Electric Holdings. It trades about 0.06 of its potential returns per unit of risk. Lincoln Electric Holdings is currently generating about 0.03 per unit of risk. If you would invest 890.00 in Mannatech Incorporated on August 26, 2024 and sell it today you would lose (50.00) from holding Mannatech Incorporated or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.36% |
| Values | Daily Returns |
Mannatech Incorporated vs. Lincoln Electric Holdings
Performance |
| Timeline |
| Mannatech Incorporated |
| Lincoln Electric Holdings |
Mannatech Incorporated and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mannatech Incorporated and Lincoln Electric
The main advantage of trading using opposite Mannatech Incorporated and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mannatech Incorporated position performs unexpectedly, Lincoln Electric 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 Lincoln Electric will offset losses from the drop in Lincoln Electric's long position.| Mannatech Incorporated vs. Edgewell Personal Care | Mannatech Incorporated vs. Inter Parfums | Mannatech Incorporated vs. Nu Skin Enterprises | Mannatech Incorporated vs. Helen of Troy |
| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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