Correlation Between Inter Parfums and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Inter Parfums 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 Inter Parfums and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Parfums and Lincoln Electric Holdings, you can compare the effects of market volatilities on Inter Parfums 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 Inter Parfums with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and Lincoln Electric.
Diversification Opportunities for Inter Parfums and Lincoln Electric
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Inter and Lincoln is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums 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 Inter Parfums 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 Inter Parfums 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 Inter Parfums i.e., Inter Parfums and Lincoln Electric go up and down completely randomly.
Pair Corralation between Inter Parfums and Lincoln Electric
Given the investment horizon of 90 days Inter Parfums is expected to under-perform the Lincoln Electric. In addition to that, Inter Parfums is 1.87 times more volatile than Lincoln Electric Holdings. It trades about -0.3 of its total potential returns per unit of risk. Lincoln Electric Holdings is currently generating about -0.46 per unit of volatility. If you would invest 25,264 in Lincoln Electric Holdings on February 1, 2024 and sell it today you would lose (3,311) from holding Lincoln Electric Holdings or give up 13.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Inter Parfums vs. Lincoln Electric Holdings
Performance |
Timeline |
Inter Parfums |
Lincoln Electric Holdings |
Inter Parfums and Lincoln Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inter Parfums and Lincoln Electric
The main advantage of trading using opposite Inter Parfums and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Parfums 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.Inter Parfums vs. J J Snack | Inter Parfums vs. John B Sanfilippo | Inter Parfums vs. Innospec | Inter Parfums vs. Independent Bank |
Lincoln Electric vs. Snap On | Lincoln Electric vs. LS Starrett | 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
CEOs Directory Screen CEOs from public companies around the world | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |