Correlation Between Lincoln Electric and TG Venture

Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and TG Venture 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 TG Venture 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 TG Venture Acquisition, you can compare the effects of market volatilities on Lincoln Electric and TG Venture 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 TG Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and TG Venture.

Diversification Opportunities for Lincoln Electric and TG Venture

-0.11

Correlation Coefficient

Lincoln Electric  TG Venture

Good diversification

The 3 months correlation between Lincoln and TGVCU is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and TG Venture Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TG Venture Acquisition 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 TG Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TG Venture Acquisition has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and TG Venture go up and down completely randomly.

Pair Corralation between Lincoln Electric and TG Venture

If you would invest  18,477  in Lincoln Electric Holdings on September 20, 2024 and sell it today you would earn a total of  500.00  from holding Lincoln Electric Holdings or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Lincoln Electric Holdings  vs.  TG Venture Acquisition

Lincoln Electric Holdings

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Electric Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Lincoln Electric is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

TG Venture Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TG Venture Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, TG Venture is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lincoln Electric and TG Venture

The main advantage of trading using opposite Lincoln Electric and TG Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, TG Venture 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 TG Venture will offset losses from the drop in TG Venture's long position.

The idea behind Lincoln Electric Holdings and TG Venture Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.