Correlation Between BTS Group and LB Foster
Can any of the company-specific risk be diversified away by investing in both BTS Group 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 BTS Group and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTS Group Holdings and LB Foster, you can compare the effects of market volatilities on BTS Group 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 BTS Group with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS Group and LB Foster.
Diversification Opportunities for BTS Group and LB Foster
Pay attention - limited upside
The 3 months correlation between BTS and FSTR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and BTS Group 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 BTS Group Holdings 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 BTS Group i.e., BTS Group and LB Foster go up and down completely randomly.
Pair Corralation between BTS Group and LB Foster
If you would invest 1,965 in LB Foster on September 3, 2024 and sell it today you would earn a total of 908.00 from holding LB Foster or generate 46.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTS Group Holdings vs. LB Foster
Performance |
| Timeline |
| BTS Group Holdings |
| LB Foster |
BTS Group and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTS Group and LB Foster
The main advantage of trading using opposite BTS Group and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTS Group 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.| BTS Group vs. LB Foster | BTS Group vs. Norfolk Southern | BTS Group vs. Union Pacific | BTS Group vs. Canadian Pacific Railway |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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