Correlation Between LB Foster and ACAFP
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By analyzing existing cross correlation between LB Foster and ACAFP 475, you can compare the effects of market volatilities on LB Foster and ACAFP 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 ACAFP. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and ACAFP.
Diversification Opportunities for LB Foster and ACAFP
Very weak diversification
The 3 months correlation between FSTR and ACAFP is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and ACAFP 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACAFP 475 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 ACAFP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACAFP 475 has no effect on the direction of LB Foster i.e., LB Foster and ACAFP go up and down completely randomly.
Pair Corralation between LB Foster and ACAFP
Given the investment horizon of 90 days LB Foster is expected to generate 0.38 times more return on investment than ACAFP. However, LB Foster is 2.62 times less risky than ACAFP. It trades about 0.08 of its potential returns per unit of risk. ACAFP 475 is currently generating about -0.39 per unit of risk. If you would invest 2,689 in LB Foster on October 20, 2024 and sell it today you would earn a total of 93.00 from holding LB Foster or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.0% |
| Values | Daily Returns |
LB Foster vs. ACAFP 475
Performance |
| Timeline |
| LB Foster |
| ACAFP 475 |
LB Foster and ACAFP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and ACAFP
The main advantage of trading using opposite LB Foster and ACAFP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, ACAFP 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 ACAFP will offset losses from the drop in ACAFP's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| ACAFP vs. AEP TEX INC | ACAFP vs. US BANK NATIONAL | ACAFP vs. Bank of Montreal | ACAFP vs. Tonix Pharmaceuticals Holding |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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