Correlation Between LB Foster and Tsuruha Holdings
Can any of the company-specific risk be diversified away by investing in both LB Foster and Tsuruha 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 Tsuruha 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 Tsuruha Holdings, you can compare the effects of market volatilities on LB Foster and Tsuruha 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 Tsuruha Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Tsuruha Holdings.
Diversification Opportunities for LB Foster and Tsuruha Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FSTR and Tsuruha is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Tsuruha Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsuruha 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 Tsuruha Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsuruha Holdings has no effect on the direction of LB Foster i.e., LB Foster and Tsuruha Holdings go up and down completely randomly.
Pair Corralation between LB Foster and Tsuruha Holdings
Given the investment horizon of 90 days LB Foster is expected to generate 0.21 times more return on investment than Tsuruha Holdings. However, LB Foster is 4.66 times less risky than Tsuruha Holdings. It trades about 0.09 of its potential returns per unit of risk. Tsuruha Holdings is currently generating about -0.07 per unit of risk. If you would invest 980.00 in LB Foster on September 5, 2024 and sell it today you would earn a total of 1,965 from holding LB Foster or generate 200.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.62% |
| Values | Daily Returns |
LB Foster vs. Tsuruha Holdings
Performance |
| Timeline |
| LB Foster |
| Tsuruha Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LB Foster and Tsuruha Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and Tsuruha Holdings
The main advantage of trading using opposite LB Foster and Tsuruha Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Tsuruha 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 Tsuruha Holdings will offset losses from the drop in Tsuruha Holdings' long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| Tsuruha Holdings vs. LB Foster | Tsuruha Holdings vs. SunLink Health Systems | Tsuruha Holdings vs. Micron Technology | Tsuruha Holdings vs. ON Semiconductor |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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