Correlation Between LB Foster and Mothercare Plc
Can any of the company-specific risk be diversified away by investing in both LB Foster and Mothercare Plc 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 Mothercare Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Mothercare Plc Ord, you can compare the effects of market volatilities on LB Foster and Mothercare Plc 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 Mothercare Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Mothercare Plc.
Diversification Opportunities for LB Foster and Mothercare Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FSTR and Mothercare is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Mothercare Plc Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mothercare Plc Ord 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 Mothercare Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mothercare Plc Ord has no effect on the direction of LB Foster i.e., LB Foster and Mothercare Plc go up and down completely randomly.
Pair Corralation between LB Foster and Mothercare Plc
If you would invest 1,940 in LB Foster on August 24, 2024 and sell it today you would earn a total of 840.00 from holding LB Foster or generate 43.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
LB Foster vs. Mothercare Plc Ord
Performance |
| Timeline |
| LB Foster |
| Mothercare Plc Ord |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LB Foster and Mothercare Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Mothercare Plc
The main advantage of trading using opposite LB Foster and Mothercare Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Mothercare Plc 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 Mothercare Plc will offset losses from the drop in Mothercare Plc's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Mothercare Plc vs. LB Foster | Mothercare Plc vs. TFI International | Mothercare Plc vs. Yuexiu Transport Infrastructure | Mothercare Plc vs. Cumulus Media Class |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges |