Correlation Between LB Foster and PHLX Swiss
Can any of the company-specific risk be diversified away by investing in both LB Foster and PHLX Swiss 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 PHLX Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and PHLX Swiss Franc, you can compare the effects of market volatilities on LB Foster and PHLX Swiss 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 PHLX Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and PHLX Swiss.
Diversification Opportunities for LB Foster and PHLX Swiss
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FSTR and PHLX is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and PHLX Swiss Franc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHLX Swiss Franc 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 PHLX Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHLX Swiss Franc has no effect on the direction of LB Foster i.e., LB Foster and PHLX Swiss go up and down completely randomly.
Pair Corralation between LB Foster and PHLX Swiss
Given the investment horizon of 90 days LB Foster is expected to generate 6.45 times more return on investment than PHLX Swiss. However, LB Foster is 6.45 times more volatile than PHLX Swiss Franc. It trades about 0.51 of its potential returns per unit of risk. PHLX Swiss Franc is currently generating about -0.14 per unit of risk. If you would invest 1,911 in LB Foster on September 4, 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. PHLX Swiss Franc
Performance |
| Timeline |
LB Foster and PHLX Swiss Volatility Contrast
Predicted Return Density |
| Returns |
LB Foster
Pair trading matchups for LB Foster
PHLX Swiss Franc
Pair trading matchups for PHLX Swiss
Pair Trading with LB Foster and PHLX Swiss
The main advantage of trading using opposite LB Foster and PHLX Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, PHLX Swiss 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 PHLX Swiss will offset losses from the drop in PHLX Swiss' long position.| LB Foster vs. Ayala | LB Foster vs. Steel Partners Holdings | LB Foster vs. FTAI Infrastructure | LB Foster vs. Griffon |
| PHLX Swiss vs. Air Products and | PHLX Swiss vs. Stepan Company | PHLX Swiss vs. Mativ Holdings | PHLX Swiss vs. JD Sports Fashion |
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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