Correlation Between LB Foster and Hudson
Can any of the company-specific risk be diversified away by investing in both LB Foster and Hudson 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 Hudson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Hudson, you can compare the effects of market volatilities on LB Foster and Hudson 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 Hudson. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Hudson.
Diversification Opportunities for LB Foster and Hudson
Pay attention - limited upside
The 3 months correlation between FSTR and Hudson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Hudson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson 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 Hudson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson has no effect on the direction of LB Foster i.e., LB Foster and Hudson go up and down completely randomly.
Pair Corralation between LB Foster and Hudson
If you would invest 1,904 in LB Foster on September 2, 2024 and sell it today you would earn a total of 969.00 from holding LB Foster or generate 50.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LB Foster vs. Hudson
Performance |
| Timeline |
| LB Foster |
| Hudson |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LB Foster and Hudson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Hudson
The main advantage of trading using opposite LB Foster and Hudson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Hudson 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 Hudson will offset losses from the drop in Hudson's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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