Correlation Between LB Foster and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both LB Foster and Yuexiu Transport 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 Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on LB Foster and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Yuexiu Transport.
Diversification Opportunities for LB Foster and Yuexiu Transport
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FSTR and Yuexiu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of LB Foster i.e., LB Foster and Yuexiu Transport go up and down completely randomly.
Pair Corralation between LB Foster and Yuexiu Transport
Given the investment horizon of 90 days LB Foster is expected to generate 0.75 times more return on investment than Yuexiu Transport. However, LB Foster is 1.33 times less risky than Yuexiu Transport. It trades about 0.41 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.23 per unit of risk. If you would invest 1,980 in LB Foster on August 27, 2024 and sell it today you would earn a total of 848.00 from holding LB Foster or generate 42.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| LB Foster |
| Yuexiu Transport Inf |
LB Foster and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Yuexiu Transport
The main advantage of trading using opposite LB Foster and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. Aquagold International | Yuexiu Transport vs. Barloworld Ltd ADR |
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.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |