Correlation Between LB Foster and Skillful Craftsman
Can any of the company-specific risk be diversified away by investing in both LB Foster and Skillful Craftsman 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 Skillful Craftsman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Skillful Craftsman Education, you can compare the effects of market volatilities on LB Foster and Skillful Craftsman 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 Skillful Craftsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Skillful Craftsman.
Diversification Opportunities for LB Foster and Skillful Craftsman
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FSTR and Skillful is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Skillful Craftsman Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillful Craftsman 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 Skillful Craftsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillful Craftsman has no effect on the direction of LB Foster i.e., LB Foster and Skillful Craftsman go up and down completely randomly.
Pair Corralation between LB Foster and Skillful Craftsman
Given the investment horizon of 90 days LB Foster is expected to generate 0.99 times more return on investment than Skillful Craftsman. However, LB Foster is 1.01 times less risky than Skillful Craftsman. It trades about 0.1 of its potential returns per unit of risk. Skillful Craftsman Education is currently generating about -0.1 per unit of risk. If you would invest 2,654 in LB Foster on November 3, 2024 and sell it today you would earn a total of 130.00 from holding LB Foster or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. Skillful Craftsman Education
Performance |
| Timeline |
| LB Foster |
| Skillful Craftsman |
LB Foster and Skillful Craftsman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Skillful Craftsman
The main advantage of trading using opposite LB Foster and Skillful Craftsman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Skillful Craftsman 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 Skillful Craftsman will offset losses from the drop in Skillful Craftsman's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Skillful Craftsman vs. Wah Fu Education | Skillful Craftsman vs. Golden Sun Education | Skillful Craftsman vs. Elite Education Group | Skillful Craftsman vs. QuantaSing Group Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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