Correlation Between NSTAR and Lincoln Electric
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By analyzing existing cross correlation between NSTAR ELEC 32 and Lincoln Electric Holdings, you can compare the effects of market volatilities on NSTAR 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 NSTAR with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSTAR and Lincoln Electric.
Diversification Opportunities for NSTAR and Lincoln Electric
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NSTAR and Lincoln is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NSTAR ELEC 32 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 NSTAR 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 NSTAR ELEC 32 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 NSTAR i.e., NSTAR and Lincoln Electric go up and down completely randomly.
Pair Corralation between NSTAR and Lincoln Electric
Assuming the 90 days trading horizon NSTAR ELEC 32 is expected to under-perform the Lincoln Electric. But the bond apears to be less risky and, when comparing its historical volatility, NSTAR ELEC 32 is 3.86 times less risky than Lincoln Electric. The bond trades about -0.2 of its potential returns per unit of risk. The Lincoln Electric Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 19,357 in Lincoln Electric Holdings on September 13, 2024 and sell it today you would earn a total of 1,551 from holding Lincoln Electric Holdings or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
NSTAR ELEC 32 vs. Lincoln Electric Holdings
Performance |
| Timeline |
| NSTAR ELEC 32 |
| Lincoln Electric Holdings |
NSTAR and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSTAR and Lincoln Electric
The main advantage of trading using opposite NSTAR and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSTAR 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.| NSTAR vs. Forsys Metals Corp | NSTAR vs. Papaya Growth Opportunity | NSTAR vs. Vita Coco | NSTAR vs. Keurig Dr Pepper |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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