Correlation Between LB Foster and SHUAA Partners
Can any of the company-specific risk be diversified away by investing in both LB Foster and SHUAA Partners 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 SHUAA Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and SHUAA Partners Acquisition, you can compare the effects of market volatilities on LB Foster and SHUAA Partners 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 SHUAA Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and SHUAA Partners.
Diversification Opportunities for LB Foster and SHUAA Partners
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between FSTR and SHUAA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and SHUAA Partners Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHUAA Partners Acqui 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 SHUAA Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHUAA Partners Acqui has no effect on the direction of LB Foster i.e., LB Foster and SHUAA Partners go up and down completely randomly.
Pair Corralation between LB Foster and SHUAA Partners
If you would invest 1,885 in LB Foster on September 1, 2024 and sell it today you would earn a total of 988.00 from holding LB Foster or generate 52.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
LB Foster vs. SHUAA Partners Acquisition
Performance |
| Timeline |
| LB Foster |
| SHUAA Partners Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LB Foster and SHUAA Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and SHUAA Partners
The main advantage of trading using opposite LB Foster and SHUAA Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, SHUAA Partners 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 SHUAA Partners will offset losses from the drop in SHUAA Partners' long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| SHUAA Partners vs. Agnico Eagle Mines | SHUAA Partners vs. Nyxoah | SHUAA Partners vs. Virco Manufacturing | SHUAA Partners vs. JBG SMITH Properties |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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