Correlation Between Univest Pennsylvania and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania 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 Univest Pennsylvania and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Lincoln Electric Holdings, you can compare the effects of market volatilities on Univest Pennsylvania 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 Univest Pennsylvania with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Lincoln Electric.
Diversification Opportunities for Univest Pennsylvania and Lincoln Electric
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Univest and Lincoln is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania i.e., Univest Pennsylvania and Lincoln Electric go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Lincoln Electric
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 0.71 times more return on investment than Lincoln Electric. However, Univest Pennsylvania is 1.4 times less risky than Lincoln Electric. It trades about 0.03 of its potential returns per unit of risk. Lincoln Electric Holdings is currently generating about -0.13 per unit of risk. If you would invest 3,176 in Univest Pennsylvania on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Univest Pennsylvania or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univest Pennsylvania vs. Lincoln Electric Holdings
Performance |
| Timeline |
| Univest Pennsylvania |
| Lincoln Electric Holdings |
Univest Pennsylvania and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Lincoln Electric
The main advantage of trading using opposite Univest Pennsylvania and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania 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.| Univest Pennsylvania vs. JPMorgan Chase Co | Univest Pennsylvania vs. Citigroup | Univest Pennsylvania vs. Wells Fargo | Univest Pennsylvania vs. Toronto Dominion Bank |
| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Snap On | Lincoln Electric vs. Eastern Co | Lincoln Electric vs. Hillman Solutions 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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