Correlation Between LB Foster and Clovis Oncology
Can any of the company-specific risk be diversified away by investing in both LB Foster and Clovis Oncology 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 Clovis Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Clovis Oncology, you can compare the effects of market volatilities on LB Foster and Clovis Oncology 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 Clovis Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Clovis Oncology.
Diversification Opportunities for LB Foster and Clovis Oncology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FSTR and Clovis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Clovis Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clovis Oncology 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 Clovis Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clovis Oncology has no effect on the direction of LB Foster i.e., LB Foster and Clovis Oncology go up and down completely randomly.
Pair Corralation between LB Foster and Clovis Oncology
If you would invest 1,878 in LB Foster on January 7, 2025 and sell it today you would lose (18.00) from holding LB Foster or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LB Foster vs. Clovis Oncology
Performance |
| Timeline |
| LB Foster |
| Clovis Oncology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
LB Foster and Clovis Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Clovis Oncology
The main advantage of trading using opposite LB Foster and Clovis Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Clovis Oncology 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 Clovis Oncology will offset losses from the drop in Clovis Oncology's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Clovis Oncology vs. NRG Energy | Clovis Oncology vs. Insteel Industries | Clovis Oncology vs. American Electric Power | Clovis Oncology vs. NorthWestern |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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