Correlation Between LB Foster and Landcadia Holdings
Can any of the company-specific risk be diversified away by investing in both LB Foster and Landcadia Holdings 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 Landcadia Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Landcadia Holdings II, you can compare the effects of market volatilities on LB Foster and Landcadia Holdings 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 Landcadia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Landcadia Holdings.
Diversification Opportunities for LB Foster and Landcadia Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FSTR and Landcadia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Landcadia Holdings II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landcadia Holdings 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 Landcadia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landcadia Holdings has no effect on the direction of LB Foster i.e., LB Foster and Landcadia Holdings go up and down completely randomly.
Pair Corralation between LB Foster and Landcadia Holdings
If you would invest 1,911 in LB Foster on September 3, 2024 and sell it today you would earn a total of 962.00 from holding LB Foster or generate 50.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
LB Foster vs. Landcadia Holdings II
Performance |
| Timeline |
| LB Foster |
| Landcadia Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LB Foster and Landcadia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Landcadia Holdings
The main advantage of trading using opposite LB Foster and Landcadia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Landcadia Holdings 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 Landcadia Holdings will offset losses from the drop in Landcadia Holdings' long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Landcadia Holdings vs. Meiwu Technology Co | Landcadia Holdings vs. MGIC Investment Corp | Landcadia Holdings vs. LB Foster | Landcadia Holdings vs. Employers Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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