Correlation Between Meiwu Technology and Lincoln Electric

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

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

Diversification Opportunities for Meiwu Technology and Lincoln Electric

-0.45

Correlation Coefficient

Meiwu Technology  Lincoln Electric

Very good diversification

The 3 months correlation between Meiwu and Lincoln is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co 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 Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and Lincoln Electric go up and down completely randomly.

Pair Corralation between Meiwu Technology and Lincoln Electric

Considering the 90-day investment horizon Meiwu Technology Co is expected to under-perform the Lincoln Electric. In addition to that, Meiwu Technology is 8.75 times more volatile than Lincoln Electric Holdings. It trades about -0.06 of its total potential returns per unit of risk. Lincoln Electric Holdings is currently generating about -0.03 per unit of volatility. If you would invest  21,761  in Lincoln Electric Holdings on November 29, 2024 and sell it today you would lose (981.00) from holding Lincoln Electric Holdings or give up 4.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Meiwu Technology Co  vs.  Lincoln Electric Holdings

Meiwu Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiwu Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Lincoln Electric Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lincoln Electric Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Meiwu Technology and Lincoln Electric

The main advantage of trading using opposite Meiwu Technology and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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 Meiwu Technology Co 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.