Correlation Between Saia and Lincoln Electric

Can any of the company-specific risk be diversified away by investing in both Saia 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 Saia and Lincoln Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saia Inc and Lincoln Electric Holdings, you can compare the effects of market volatilities on Saia 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 Saia with a short position of Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Lincoln Electric.

Diversification Opportunities for Saia and Lincoln Electric

0.12

Correlation Coefficient

Saia  Lincoln Electric

Average diversification

The 3 months correlation between Saia and Lincoln is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc 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 Saia 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 Saia Inc 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 Saia i.e., Saia and Lincoln Electric go up and down completely randomly.

Pair Corralation between Saia and Lincoln Electric

Given the investment horizon of 90 days Saia Inc is expected to under-perform the Lincoln Electric. In addition to that, Saia is 1.43 times more volatile than Lincoln Electric Holdings. It trades about -0.19 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  18,913  in Lincoln Electric Holdings on December 19, 2024 and sell it today you would earn a total of  147.00  from holding Lincoln Electric Holdings or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Saia Inc  vs.  Lincoln Electric Holdings

Saia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lincoln Electric Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Electric Holdings are ranked lower than 1 (%) 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.

Pair Trading with Saia and Lincoln Electric

The main advantage of trading using opposite Saia and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia 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.

The idea behind Saia Inc and Lincoln Electric Holdings 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.