Correlation Between Forsys Metals and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Forsys Metals 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 Forsys Metals and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forsys Metals Corp and Lincoln Electric Holdings, you can compare the effects of market volatilities on Forsys Metals 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 Forsys Metals with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forsys Metals and Lincoln Electric.
Diversification Opportunities for Forsys Metals and Lincoln Electric
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Forsys and Lincoln is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp 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 Forsys Metals 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 Forsys Metals Corp 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 Forsys Metals i.e., Forsys Metals and Lincoln Electric go up and down completely randomly.
Pair Corralation between Forsys Metals and Lincoln Electric
Assuming the 90 days horizon Forsys Metals Corp is expected to under-perform the Lincoln Electric. In addition to that, Forsys Metals is 2.99 times more volatile than Lincoln Electric Holdings. It trades about -0.02 of its total potential returns per unit of risk. Lincoln Electric Holdings is currently generating about -0.02 per unit of volatility. If you would invest 22,254 in Lincoln Electric Holdings on October 24, 2024 and sell it today you would lose (2,393) from holding Lincoln Electric Holdings or give up 10.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.6% |
Values | Daily Returns |
Forsys Metals Corp vs. Lincoln Electric Holdings
Performance |
Timeline |
Forsys Metals Corp |
Lincoln Electric Holdings |
Forsys Metals and Lincoln Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Forsys Metals and Lincoln Electric
The main advantage of trading using opposite Forsys Metals and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys Metals 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.Forsys Metals vs. Lotus Resources Limited | Forsys Metals vs. Namibia Critical Metals | Forsys Metals vs. Skyharbour Resources | Forsys Metals vs. Pasinex Resources Limited |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Commodity Directory Find actively traded commodities issued by global exchanges |