Correlation Between LB Foster and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both LB Foster and Cedar Realty 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 LB Foster and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Cedar Realty Trust, you can compare the effects of market volatilities on LB Foster and Cedar Realty 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 LB Foster with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Cedar Realty.
Diversification Opportunities for LB Foster and Cedar Realty
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FSTR and Cedar is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust and LB Foster 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 LB Foster are associated (or correlated) with Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of LB Foster i.e., LB Foster and Cedar Realty go up and down completely randomly.
Pair Corralation between LB Foster and Cedar Realty
Given the investment horizon of 90 days LB Foster is expected to generate 1.21 times more return on investment than Cedar Realty. However, LB Foster is 1.21 times more volatile than Cedar Realty Trust. It trades about 0.05 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.05 per unit of risk. If you would invest 2,299 in LB Foster on August 28, 2024 and sell it today you would earn a total of 529.00 from holding LB Foster or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. Cedar Realty Trust
Performance |
| Timeline |
| LB Foster |
| Cedar Realty Trust |
LB Foster and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Cedar Realty
The main advantage of trading using opposite LB Foster and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Cedar Realty 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 Cedar Realty will offset losses from the drop in Cedar Realty's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Cedar Realty vs. Saul Centers | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company | Cedar Realty vs. Simon Property Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |