Correlation Between Lincoln Electric and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Mercedes Benz 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 Mercedes Benz 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 Mercedes Benz Group, you can compare the effects of market volatilities on Lincoln Electric and Mercedes Benz 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 Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Mercedes Benz.
Diversification Opportunities for Lincoln Electric and Mercedes Benz
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Mercedes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Mercedes Benz Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz Group 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 Mercedes Benz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Mercedes Benz go up and down completely randomly.
Pair Corralation between Lincoln Electric and Mercedes Benz
If you would invest (100.00) in Mercedes Benz Group on January 30, 2024 and sell it today you would earn a total of 100.00 from holding Mercedes Benz Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Lincoln Electric Holdings vs. Mercedes Benz Group
Performance |
Timeline |
Lincoln Electric Holdings |
Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln Electric and Mercedes Benz Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lincoln Electric and Mercedes Benz
The main advantage of trading using opposite Lincoln Electric and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Mercedes Benz 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 Mercedes Benz will offset losses from the drop in Mercedes Benz's long position.Lincoln Electric vs. Snap On | Lincoln Electric vs. LS Starrett | Lincoln Electric vs. Eastern Co | Lincoln Electric vs. Hillman Solutions Corp |
Mercedes Benz vs. SunOpta | Mercedes Benz vs. Rocky Brands | Mercedes Benz vs. Asbury Automotive Group | Mercedes Benz vs. GMS Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |