Correlation Between LB Foster and LandBridge Company
Can any of the company-specific risk be diversified away by investing in both LB Foster and LandBridge Company 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 LandBridge Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and LandBridge Company LLC, you can compare the effects of market volatilities on LB Foster and LandBridge Company 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 LandBridge Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and LandBridge Company.
Diversification Opportunities for LB Foster and LandBridge Company
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FSTR and LandBridge is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and LandBridge Company LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandBridge Company 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 LandBridge Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandBridge Company has no effect on the direction of LB Foster i.e., LB Foster and LandBridge Company go up and down completely randomly.
Pair Corralation between LB Foster and LandBridge Company
Given the investment horizon of 90 days LB Foster is expected to generate 0.64 times more return on investment than LandBridge Company. However, LB Foster is 1.57 times less risky than LandBridge Company. It trades about 0.53 of its potential returns per unit of risk. LandBridge Company LLC is currently generating about 0.23 per unit of risk. If you would invest 1,911 in LB Foster on September 3, 2024 and sell it today you would earn a total of 1,009 from holding LB Foster or generate 52.8% 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. LandBridge Company LLC
Performance |
| Timeline |
| LB Foster |
| LandBridge Company |
LB Foster and LandBridge Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and LandBridge Company
The main advantage of trading using opposite LB Foster and LandBridge Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, LandBridge Company 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 LandBridge Company will offset losses from the drop in LandBridge Company's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| LandBridge Company vs. ChampionX | LandBridge Company vs. Primoris Services | LandBridge Company vs. Simpson Manufacturing | LandBridge Company vs. Everus Construction Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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