Correlation Between LB Foster and Far East
Can any of the company-specific risk be diversified away by investing in both LB Foster and Far East 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 Far East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Far East Wind, you can compare the effects of market volatilities on LB Foster and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Far East.
Diversification Opportunities for LB Foster and Far East
Pay attention - limited upside
The 3 months correlation between FSTR and Far is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Far East Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Wind 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Wind has no effect on the direction of LB Foster i.e., LB Foster and Far East go up and down completely randomly.
Pair Corralation between LB Foster and Far East
If you would invest 1,940 in LB Foster on September 12, 2024 and sell it today you would earn a total of 1,010 from holding LB Foster or generate 52.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. Far East Wind
Performance |
| Timeline |
| LB Foster |
| Far East Wind |
LB Foster and Far East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Far East
The main advantage of trading using opposite LB Foster and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Far East vs. Hudson Pacific Properties | Far East vs. Grocery Outlet Holding | Far East vs. Getty Realty | Far East vs. LB Foster |
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.
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