Correlation Between LB Foster and Joint Stock
Can any of the company-specific risk be diversified away by investing in both LB Foster and Joint Stock 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 Joint Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Joint Stock, you can compare the effects of market volatilities on LB Foster and Joint Stock 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 Joint Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Joint Stock.
Diversification Opportunities for LB Foster and Joint Stock
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSTR and Joint is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of LB Foster i.e., LB Foster and Joint Stock go up and down completely randomly.
Pair Corralation between LB Foster and Joint Stock
Given the investment horizon of 90 days LB Foster is expected to generate 1.29 times more return on investment than Joint Stock. However, LB Foster is 1.29 times more volatile than Joint Stock. It trades about 0.08 of its potential returns per unit of risk. Joint Stock is currently generating about -0.13 per unit of risk. If you would invest 2,689 in LB Foster on October 20, 2024 and sell it today you would earn a total of 93.00 from holding LB Foster or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. Joint Stock
Performance |
| Timeline |
| LB Foster |
| Joint Stock |
LB Foster and Joint Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Joint Stock
The main advantage of trading using opposite LB Foster and Joint Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Joint Stock 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 Joint Stock will offset losses from the drop in Joint Stock's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Joint Stock vs. Flutter Entertainment plc | Joint Stock vs. Strategic Education | Joint Stock vs. Sonos Inc | Joint Stock vs. Ubisoft Entertainment |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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