Correlation Between AKITA Drilling and LB Foster
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and LB Foster 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 AKITA Drilling and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and LB Foster, you can compare the effects of market volatilities on AKITA Drilling and LB Foster 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 AKITA Drilling with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and LB Foster.
Diversification Opportunities for AKITA Drilling and LB Foster
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AKITA and FSTR is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with LB Foster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Foster has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and LB Foster go up and down completely randomly.
Pair Corralation between AKITA Drilling and LB Foster
Assuming the 90 days horizon AKITA Drilling is expected to under-perform the LB Foster. But the pink sheet apears to be less risky and, when comparing its historical volatility, AKITA Drilling is 2.73 times less risky than LB Foster. The pink sheet trades about -0.07 of its potential returns per unit of risk. The LB Foster is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 1,885 in LB Foster on September 1, 2024 and sell it today you would earn a total of 988.00 from holding LB Foster or generate 52.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AKITA Drilling vs. LB Foster
Performance |
| Timeline |
| AKITA Drilling |
| LB Foster |
AKITA Drilling and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and LB Foster
The main advantage of trading using opposite AKITA Drilling and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, LB Foster 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 LB Foster will offset losses from the drop in LB Foster's long position.| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
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
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stocks Directory Find actively traded stocks across global markets |